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The Sarbanes-Oxley Act of 2002 (SOX) was put into effect because of the corporate scams that were being committed in that time period. Congress passed the act to force companies to keep closer tabs on their internal controls. Under SOX, companies are required

In July 2002, a corporate reform bill was passed into United States Federal law by the U.S. Senate and the U.S. House of Representatives. This legislation introduced new and amended ethical standards regarding financial practice and corporate governance for all publicly traded U.S. companies, as well as for management and accounting organizations. U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley spearheaded the Sarbanes-Oxley (SOX) Act (Pub. L. 107-204) (Sarbanes & Oxley, 2002). This was originally known as “Public Company Accounting Reform and Investor

As consultants for Ancher Public Trading (APT), Learning Team A would like to discuss the implications of the Sarbanes-Oxley (SOX) legislation. This memorandum provides a brief history of SOX¡¦s creation, explains the relationship amongst the FASB, SEC and PCAOB, describes the pros and cons of SOX, assesses the impacts of SOX, and lists ethical considerations of SOX.

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

In this court case in which the Petitioner accounting firm which was a non profit organization wanted to sue the PCAOB because they believe that the President had not control over the members of the board and threaten the separation of power law. The Sarbanes-Oxley Act, also known as SOX was to put in place to protect investors from fraud in accounting activities in corporations. The courts ruled that the separation of powers was not broken because The President of the United States can remove member of the SEC, which the SEC controls the PCAOB.

The Sarbanes-Oxley Act, or SOX Act, was enacted on July 30, 2002. Since it was enacted that summer it has changed how the public business handle their accounting and auditing. The federal law was made coming off of a number of large corporations involved in scandals. For example a company like Enron was caught in accounting fraud in late 2001 when the company was using false financial statements. Once Enron was caught that had many lawsuits filed against them and had to file for bankruptcy. It was this scandal that played a big part in producing the Sarbanes-Oxley act in 2002.

The development of the Sarbanes-Oxley Act (SOX) was a result of public company scandals. The Enron and Worldcom scandals, for example, helped investor confidence in entities traded on the public markets weaken during 2001 and 2002. Congress was quick to respond to the political crisis and "enacted the Sarbanes-Oxley Act of 2002, which was signed into law by President Bush on July 30" (Edward Jones, 1), to restore investor confidence. In reference to SOX, penalties would be issued to non-ethical or non-law-abiding public companies and their executives, directors, auditors, attorneys, and securities analysts (1). SOX significantly transformed the procedures in which public companies handle internal

The Sarbanes-Oxley Act of 2002 is one of the most important legislations passed in the 21st century effecting financial practice and corporate governance. This act was passed on July 30, 2002 thanks to Representative Michael Oxley a republican from Ohio and Senator Paul Sarbanes a democrat from Maryland. They both passed two different bills that pertain to the same problem which had to do with corporation's auditing accountability and financial fraud problems within corporations. One was bill (S. 2673) brought by Senator Sarbanes and the other bill (H. R. 3763) brought by Representative Oxley. Both bills where passed separately one by the house and the other by the

A recent study by Xue Wang (Emory University) tackles how SOX has affected the compensation and turnover rates of CFOs.   They play a critical role in developing firms’ financial reporting and making voluntary disclosure decisions.   Moreover, CFOs are ultimately responsible for the quality of internal control systems.   The study provides some important insights about the impact of SOX on the executive labor market.   It shows that requiring more disclosure of information about a firm’s internal controls provides some positive benefits with respect to corporate governance, in this case making it easier for boards to monitor the activities of CFOs.   In comparing and contrasting firms with strong internal controls received an increase in salary, bonus, and total compensation in the post-SOX time periods.   In contrast, CFOs of corporations reporting a problem with their internal controls incurred a significant reduction in their compensation packages.   With respect to CFO turnover, Wang did find that CFO turnover rates generally increased form the pre- to post-SOX period.

This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government's and the Security and Exchange Commission's concern in promoting ethical standards in terms of financial disclosure in the corporate environment.

Introduction: A discussion on corporate regulation and governance is of great importance in today’s economic world. A number of high profile collapses such as HIH, One Tel, Harris Scarfe, Ansett, focuses ones attention on governance issues.

There can be a number of reasons for a company to go public or private. There are benefits, as well as disadvantages that go along with either course of action (Exhibit 1 for details). When firms decide to go private, they are no longer listed on any stock exchange market. The pressure of keeping accounting regularity and reporting to the public is no longer an issue. Instead, firms can be more flexible to reorganize the business profile as well as the management team. In many cases, shareholders and board members receive very rewarding financial benefits from this transaction. However, in some situations, public firms do not have a choice in the matter, as is the case in a “hostile takeover”.

Agency costs arising from separation of ownership from management has been a concern by most large corporation. Management might act in their own best interest at the expenses of shareholder interest due to the existence of information asymmetry between both parties. However, agency costs can be mitigated by reducing the information asymmetry between management and shareholders via information discloses by management in the firm’s annual report (Donnelly et al 2008). As such, a number of studies had been conducted to examine such disclosures and their relation with board structure which comprises proportion of non-executive directors, role duality, audit committee size and block holder ownership.

Sarbanes Oxley (also known as SOX) is legislation passed by the United States Congress in 2002, in the wake of a number of major corporate accounting scandals. Enron, WorldCom, Tyco, and others cost investors billions when their stock prices collapsed. As a result of SOX, top management must separately certify the accuracy of financial Furthermore, consequences for fraudulent financial activity are much more severe. Also, SOX intensified the management role of boards of directors and the independence of the external auditors who review the accuracy of corporate financial statements. The primary changes caused the formation of the Public Company Accounting Oversight Board, the assessment of personal liability to auditors, executives and board members and creation of the Section 404, which recognized internal control events that had not existed before the legislation.

Chhaochharia and Grinstein (2007) looked at the impact of the 2002 governance rules established by the Sarbanes-Oxley Act on firm value. They found that less compliant firms earn positive abnormal returns compared to more compliant firms. They also found that less compliant large firms earn positive abnormal returns but less compliant small firms earn negative abnormal returns.