Sarbanes Oxley Act Paper

934 WordsDec 12, 20124 Pages
Running Head: SARBANES OXLEY ACT Sarbanes Oxley Act Introduction Sarbanes Oxley Act is focused towards identifying accounting frauds in different public companies. This paper discusses about various reasons for the introduction of Sarbanes Oxley Act and causes that has been overlooked. Causes for Sarbanes-Oxley Act Sarbanes Oxley Act is US federal law, which is established in order to set out the some standards for accounting firms, public company boards and management. These standards are established in order to overcome the problem of accounting scandals. Companies such as Enron and WorldCom have created major accounting scandals. Sarbanes-Oxley Act protects the investors from the accounting scandals…show more content…
This guideline helps in brining substantive change in Sarbanes Oxley Act. It has been analyzed that SOX require audit work papers and other relevant information for the period of minimum seven years. These ramifications within a short period help in improving the effectiveness of Sarbanes Oxley Act. SOX are also focused towards using the internal auditors as a critical resource management. Through the internal auditors resources within the organization can be allocated easily and frauds can be controlled (Mayo, 2010). SOX have also developed security professionals in order to handle the issues related to frauds and other internal control problems. Enron is the best example of proving the effectiveness of ramification of Sarbanes Oxley Act. Ramification of Sarbanes Oxley Act for Long Run Sarbanes Oxley Act has prepared ramifications for the long run along with short run. It has been analyzed that long run ramification is helpful in achieving the growth for long run and helps in achieving aims and objectives. Sarbanes Oxley Act is supported through academics, which helps in focusing towards the IS auditors, securities and internal auditors. For example in order to detect the fraud in WorldCom, Sarbanes Oxley Act has focused towards using the academics, which helps in identifying the problem areas through internal auditors and securities (Shirley, 2002).

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