Sarbanes-Oxley Act of 2002

985 WordsJun 8, 20144 Pages
Sarbanes-Oxley Act of 2002 Week # 2 Individual Assignment Sox Key Main Aspects for a Regulatory Environment Sarbanes-Oxley Act was passed in 2002 by former president George Bush. Essentially to combat the Enron crisis. The Sox Act basically has regulatory control and creates an enviroment that is looking out for the public. Ideally this regulatory environment protects the public from fraud within corporations. Understanding, that while having this regulatory control at times the Sox requirements need to be tweaked or amended. Not only now but in the future as well. The main aspects of the Sox act are essentially looking out for our welfare as a consumer. Our government has the obligation to regulate…show more content…
This is great for accountability within an organization. Now the question would be for the future can the Sarbanes-Oxley Act work? And what are the ramifications in a long-term projection? In some ways I feel this act could be sustainable in a long-term scope to keep companies and corporations in check. However I think this was created after the Enron situation and purely done because of that. Our government instead of being proactive was reactive and came up with this act for pure necessity and panic and public outcry. However even if that’s the case, this did at least set a framework and accountability for companies and corporations. Going forward this has worked for at least 10 years or so, however it should ratified to more current times and situations. Clayton Brite tends to agree with me; “When looking back upon the first ten years of the Sarbanes-Oxley Act, one can only conclude that it has placed an undue burden our public companies and stifled our economic growth. The Act’s costs have greatly outweighed its benefits and thus needs reformed. Its effects have been perhaps more pronounced by the current financial crisis and the slow economic recovery. It is my opinion that lawmakers felt the pressure to punish corporate Americans when they should have focused their attention on trying to reduce information asymmetry. Sarbanes-Oxley was written and passed within one month in 2002. With the

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