Sarbanes Oxley Act Of 2002

1965 Words Nov 17th, 2014 8 Pages
Introduction There were several large scandals in the beginning years of the 2000’s. The public had a lack of trust within the capital markets and investors who had invested their capital would soon find out that they had lost a substantial amount, as share prices decreased. Senator Paul Sarbanes and Representative Michael Oxley both came together and were part of creating legislation which would deter future scandals such as Enron, WorldCom, Tyco amongst other frauds that led the public lose trust in the markets- to never happen again. Sarbanes-Oxley Act of 2002 is comprised of 11 sections, and one of them is the creation of the (PCAOB) Public Company Accounting Oversight Board, PCAOB definition “The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports.” Because of Sarbanes Oxley, private companies who think of going public must take into consideration the stricter requirements of going public and see what it will take to become Sarbanes Oxley compliant. Going Public means registering shares of stock with the SEC and selling your shares to the public. Section 404 of SOX refers to stricter oversight of internal controls. Therefore, the timeline for a private company into considering going public is detrimental because they will have to make sure their…

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