The Importance Of The Sarbanes-Oxley Act

Lastly, for the portion of domestic antitrust, we will examine the Sarbanes Oxley Act. Enacted in 2002 it increases transparency in accounting. It was designed to prevent accounting errors and fraud in financial disclosures. The SOX act stipulates that the periodic financial reports be carried out in a certain way. The signing officers must review and certify the report prior to release. They are required to make sure all information is clear, true, not misleading and does not omit any important details. The signing officers are also required to evaluate the internal controls and their effectiveness within ninety days of the report. If there are any areas of internal control that are not working or may have issues they must also report this, along with any responsible employees. Finally, they must make sure the financial picture is being fairly portrayed through all of this.

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 Sarbanes-Oxley Act was a law created in 2002 to ensure that the boards of public companies oversee their companies in a more competent and transparent way in order to protect investors. Section 302 refers to the obligations of the corporate officers who sign the financial reports. The officers are responsible for verifying that the report is accurate and represents a true picture of the company’s financial condition. Section 401 states that The Commision must evaluate the financial reports. Section 404 covers the company’s internal control structure and the requirements of the accounting firm in assessing internal controls and reporting procedures. Section 409 requires a company to disclose information on changes to financial conditions or

The purpose of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities law, and for other purposes. (Lander, 2004) The Act created new standards for public companies and accounting firms to abide by. After multiple business failures due to fraudulent activities and embezzlement at companies such as Enron Sarbanes and Oxley recognized a need for the revamping of our financial systems laws, rules and regulations. Thus, the Sarbanes-Oxley Act was born.

The Sarbanes-Oxley Act of 2002 was passed by congress in 2002 and has been instrumental in protecting investor from fraud. The Act was passed to respond to the accounting malpractices of many corporations such as ENRON, who conducted many deceiving practices. It Is also known as the SOX Act and it required strict reform to improve financial disclosures from corporation to prevent fraud. This has been instrumental and has brought a higher level of accountability to companies.

The Sarbanes-Oxley Act was enacted on July 30, 2002. It was enacted by the 107th United States Congress. It is named after sponsors U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It is also known as the ‘Public Company Accounting Reform and Investor Protection Act’ in the Senate and ‘Corporate and Auditing Accountability and Responsibility Act’ in the House. The main purpose of this act was to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. This act was enacted as a result to a number of corporate and accounting scandals including those affecting Enron, Tyco internationals, Adelphia, Peregrine Systems, and WorldCom. The

The Sarbanes-Oxley Act of 2002, which is also known as the Public Company Accounting and Investor Protection Act or the Corporate and Auditing Accountability and Responsibility Act and then more commonly called Sarbanes-Oxley, or SOX, is a United States federal law that set new or enhanced standards for all of the United States public company boards, management and public accounting firms.

After major corporate and accounting scandals like those that affected Tyco, Worldcom and Enron the Federal government passed a law known as the Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act. This law was passed in hopes of thwarting illegal and misleading acts by financial reporters and putting a stop to the decline of public trust in accounting and reporting practices. Two important topics covered in Sarbanes-Oxley are auditor independence and the reporting and assessment of internal controls under section 404.

Sarbanes-Oxley Act contains 11 titles, which provide the specific guidelines and regulations for financial reporting. The titles are: Public Company Accounting Oversight Board (PCAOB), Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflict of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns and Corporate Fraud Accountability. The introduction of the act states that it is an act “to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes”. (Sarbanes-Oxley Act, 2002)

In the corporate world today the rules and regulations are stricter than they were in early 2000. The development of corporate governance that established procedures to be used by officers and directors for lines of responsibility, approval, oversight by key stockholders, and set the rules for corporate decision making became more extreme. The Sarbanes-Oxley Act (SOX) of 2002 made the use of ethical decision making more prominent in today's business environment. The SOX Act established the penalties for both criminal and civil charges as well as those in the corporate world are not protected. The term "piercing the corporate veil"

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

The Sarbanes-Oxley Act. An act passed by U.S. Congress in 2002 to protect investors and the general public from the possibility of accounting errors and fraudulent practices by corporations. The Sarbanes-Oxley Act (SOX), named after U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley, which contains eleven sections, mandated strict reforms to improve financial disclosures and prevent accounting fraud. The eleven sections of the bill cover responsibilities of a public corporation’s board of directors, adds criminal penalties for certain misconduct, and also requires the Securities and Exchange Commission (SEC) to create regulations to define how public corporations are to comply with the law. SOX other main purpose is also

The Sarbanes-Oxley Act also known as SOX came into existence in July 2002 and led to key changes to the regulation of corporate governance and financial practice in addition to setting a number of non-negotiable deadlines for compliance. Its purpose is to protect shareholders and the general public from accounting errors and fraudulent practices, as well as improve the accuracy of corporate disclosures. It is named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main originators. The Sarbanes-Oxley Act passed through both houses of Congress on a surge of bipartisan political support. Public shock influenced the political process. Congress was compelled to react assertively to the Enron media fallout, a struggling stock market, and impending re-elections. As a result, the Sarbanes-Oxley Act passed in the Senate

The Sarbanes-Oxley Act, enacted as a reaction to the WorldCom, Enron, and other corporate scandals, improved the regulatory protections presented to U.S. investors by adding an audit committee requirement, intensification of auditor independence, increasing disclosure requirements, prohibiting loans to executives, adding a certification requirement, and strengthening criminal and civil penalties for violations of securities laws.

In 2002, the Sarbanes Oxley Act was ratified to address critical challenges impacting the way all firms are reporting financial information. Since this happened, a variety of companies have been implementing these standards using different techniques. In the case of IT activities, these provisions are designed to enhance reporting and communication. To fully understand the impact of the law on IT requires examining if Sarbanes Oxley is not already embraced by these firms and identifying three areas that have yet to be resolved (in the form of questions). Together, these different elements will highlight the impact of the law on IT related activities.