Sarbanes Oxley Act : Government Policy Paper

967 Words4 Pages
Sarbanes-Oxley Act
Government Policy Paper
Kelly L. Privatte
Cosumnes River College

Author Note
This paper was prepared for Economics 304, taught by Professor Nguyen
Introduction
The government formulates various laws to achieve optimum utilization of resources in the public sphere. Sarbanes-Oxley Act is one of the numerous laws drafted to optimize resources utilization in public companies (McNally, 2013). The act seeks to attain maximization utilization of resources by entrenching accountability and transparency in the reporting of financial matters. To this end, this paper explores the effects of Sarbanes-Oxley Act on United States financial market.
Background and rationale
Accountability is a critical factor for all public and private companies. In public companies accountability increases, public confidence in the board of management entrusted with a corporation. However, lack of accountability and transparency leads to loss of public confidence in the management of any entity. To this end, the state provides the legislative framework that ensures accountability and transparency prevails in public entities (McNally, 2013). Thus, the role of government is to ensure public companies are managed in a transparent and accountable manner as a way of attracting more investments and retaining public confidence. Sarbanes-Oxley Act is a law in the United States enacted to ensure public companies adhere to transparent standards of accounting in resource usage. The act
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