Sarbanes Oxley Act Of 2002 Essay

1380 WordsOct 27, 20166 Pages
As a response to several corporate failures resulting from corporate misconduct and fraud, Congress passed the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act is an accounting and business related law that was put into place to help boost confidence in financial accounting and financial markets (US Sarbanes Oxley Act). Some of its key provisions are that it requires the CEO and CFO to personally sign off on all financial statements, increases penalties for those who violate the act, and it protects whistleblowers (SOX 2002). Clearly, Sarbanes-Oxley can improve ethics in financial reporting and the purpose of this paper is to show how. A number of people who have studied this topic have suggested that Sarbanes-Oxley is a beneficial law that can improve financial reporting. Paul Volcker and Arthur Levitt Jr. of the Wall Street Journal and Stephen Wagner and Lee Dittmar of the Harvard Business Review are just a few of them who’s articles helped shape this paper. Julia Hanna’s article on Forbes was also used in writing this paper. Obviously, the Sarbanes-Oxley Act of 2002 was also used in this paper, as well as, the AICPA Audit Committee Toolkit. Peter Yeoh’s article in the International Journal of Disclosure and Governance was also helpful. When discussing Sarbanes-Oxley’s supposed burdens, critics focus on Section 404 of the Act which requires a “publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls” (Federal Issues).

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