Sarbanes Oxley Act Paper

Sarbanes –Oxley Act, enacted by the United States congress is aimed at protecting investors. The protection is provided by improving the accuracy and reliability of corporate disclosures.

The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and covers and sets new performance standards for boards of directors and managers of companies and accounting mechanisms of all publicly traded companies in America. It also introduces criminal liability for the board of directors and a requirement by

Sarbanes–Oxley, Sarbox or SOX, is a United States federal law which was introduced in 2002. It is also known as the “Public Company Accounting Reform and Investor Protection Act” and “and 'Corporate and Auditing Accountability and Responsibility Act”. The main objective of the act is to protect investors by improving the accuracy and reliability of corporate disclosures. New aspects are created by SOX act for corporate accountability as well as new penalties for wrong doings. It was basically introduced after major corporate and accounting scandals including the scandals of Enron, WorldCom etc so that the same kind of scandals do not repeat again.

The Sarbanes-Oxley Act, also known as SOX Act, is a federal law that was passed on July 30, 2002, by Congress. This law was established to help set new or enhance laws for all United States accounting firms, management, and public company. The SOX Act would now make corporate executives accountable for their unethical behavior. This bill was passed due to the action of the Enron and Worldcom scandal, which cost their investors billions of dollars, caused their company to fold, and questioned the nations' securities markets.

According to the textbook, Sarbanes-Oxley Act is a federal statute enacted by Congress to improve corporate governance (Cheeseman, H. R., p.344). It was passed by congress that sets policy and regulates the accounting practices of U.S corporations.

This paper will discuss the legislation that was enacted following these events. It is known as the Public Accounting Return and Investor Protection Act, better known as the Sarbanes-Oxley Act, and has been enacted since the year 2002 (Mishkin, 2012, p. 158). This Act is applicable to all public companies within the US as well as any international companies who have securities within the US registered with the SEC ("The Vendor-Neutral Sarbanes-Oxley Site", 2012). In this paper, it will be discussed why Sarbanes-Oxley was enacted and the key specifications.

In 2002 the telecommunication company, WorldCom committed one of the biggest accounting scandals of all time. They perpetrated over *1 $3.8 billion in fraud, leading to a loss of 30,000 jobs and $180 billion losses for investors . This is one of the several accounting scandals that led to the passing of Sarbanes-Oxley Act, which introduced the most comprehensive set of new business regulations since the 1930’s. The Sarbanes-Oxley Act (SOX) is an act that was passed by United States Congress in 2002. This act safeguarded investors from the likelihood of fraudulent accounting practices of publicly traded organizations by authorizing strict reforms to advance financial disclosures and prevent accounting frauds. With SOX being an extremely important piece of legislature it is necessary to understand the reasons why SOX was passed, how it was passed, what it entails, the aftermath of the act. To understand the events that lead to SOX passing it is imperative to grasp the business regulations that existed and allowed these accounting scandals to occur.

The 2002 Sarbanes-Oxley Act was implemented for the main purpose of protecting investors through enhancing and promoting a real sense of transparency, precision and accountability when it comes to the governance of corporate entities and this was to ensure that the divulgences employed by the corporates are in pursuant to the ordinances of the sureties of the investors and the act also had other functions as well. In brief, the Act was enactment in 2002 was mainly that it helps in restoration of public confidence and integrity to the financial markets as events witnessed by corporates going under with examples like Tyco, Enron, Adelphia and Worldcom (Orin, 2008). It became very crucial for corporates to engage in effective corporate

The Sarbanes-Oxley Act was enacted in response to a series of high-profile financial scandals that occurred in the early 2000’s at companies including Enron, WorldCom, and Tyco that rattles investors’ confidence (Sarbanes-Oxley Act/SOX, n.d.). The Sarbanes-Oxley Act better known as SOX was drafted by U.S. Congressman Paul Sarbanes and Michael Oxley and was put forth to improve corporate governance and accountability (Sarbanes-Oxley/SOX, n.d.). Now, all companies must be governed themselves accordingly (Sarbanes-Oxley/SOX, n.d.).

The Sarbanes-Oxley Act of 2002 was created and implemented specifically following the large corporate scandals involving Enron and WorldCom in 2002. The internal auditing was very poor for the corporate giants and they basically performed however they chose. The Sarbanes-Oxley Act caused the corporations to modify their auditing schemes, the compliances became stricter, and the complaints about the new act grew large in numbers. The corporate managers’ focus on increasing their cash flow and expanding their budget was more like an epidemic instead of an honest job duty (Ferrell, Hirt, & Ferrell, 2009).

The Sarbanes-Oxley Act has a direct effect on corporate governance, and it is the strengthening of audit committees at public companies. This audit committee members oversees the company’s the management accounting decisions and gain new responsibilities such as approving numerous audit and non-audit services, selecting and overseeing external auditors, and handling complaints regarding the management’s accounting practices (Blokhin, 2015). There has been increased attention to corporate governance resulted from the passage the Sarbanes-Oxley Act; therefore, this paper is going to address about three ways, management oversight, internal control, and ethical conduct, which are responsible for a company’s accounting information have been affected.

On July 30, 2002, the Sarbanes Oxley Act (also known as SOX) was signed into law by President George W. Bush. The Sarbanes Oxley Act of 2002 is a federal law that set new or improved standards for all U.S. public company boards, management and public accounting firms. Covered in the eleven titles are additional corporate board responsibilities, auditing requirements and criminal penalties. This essay reviews the implications of the Sarbanes Oxley Act on the accounting profession.

To prevent future financial fraud the U.S congress developed The Sarbanes-Oxley Act of 2002,which was enforced by the U.S. Securities and Exchange Commission.The Sarbanes-Oxley Act is one of the most monumental acts issued by the U.S congress to safeguard investors and shareholders from company’s misrepresentation their financial information. This also forced companies to follow specific guidelines and if they did not comply they could be audited or faced with legal action. In my perspective I found this outcome of the Enron scandal constructive, many of the guidelines created by the United States

The Sarbanes-Oxley is an Act passed by the U.S congress in the year 2002. Its main aim was to protect investors from exposure to fraudulent activities through accounting activities by United States corporations. Due to the increase in fraudulent activities by large corporationssuch as Enron Corporation at the turn of the 21stcentury, the United States congress passed the Act. However, this essay would identify the pros and cons associated with this Act. The Sarbanes-Oxley Act takes into account recent cases such as the multibillion fraudulent cases such as the Enron scandal that led to the fall of the

Sarbanes Oxley Act of 2002 or the Public Company Accounting Reform and Investor Protection Act, also known as Corporate and Auditing Accountability and Responsibility Act (hereinafter the “Sarbanes Oxley Act”) was enacted by the US Congress in response to the accounting scandals such as Enron, Tyco International, Adelphia and Worldcom. In early 2000, the American stock markets had crashed, after a long boom period during the 1990s. Stock prices continued to be low for several years, until recovery began in 2003. What the Sarbanes Oxley Act sought to do was to reform corporate governance and accounting standards in a way that would create greater transparency and more accountability. Sarbanes Oxley led to greater internal control of financial reporting, and increased expertise and independence among more-focused boards, committees and directors. Sarbanes Oxley Act especially reinforced the concept of independence on boards by focusing on the independent directors. It also strengthened whistleblowers and built protections and safeguards against persecution of whistleblowers. It introduced audit requirements which were designed to ensure financial probity. Finally it also crystallized the role of the in-house counsel in a business organization making it akin to a watchdog.