The Sarbanes-Oxley Act (SOX)

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

The Sarbanes-Oxley Act (SOX) of 2002 was implemented to deter fraudulent activities amongst companies by monitoring and auditing financial activities as well as set up internal controls to aid in the safeguard of company funds and investor’s interest. SOX also regulates the non-audit tax services (NATS) that can be performed by an auditing firm. SOX was passed by Congress in 2002 in an attempt to address the unethical behaviors of corporate firms such as Enron, WorldCom, Sunbeam, and others (Raabe, Whittenburg, Sanders, & Sawyers, 2015). Raabe et al. (2015) continues explaining that SOX was created in response to the inadequacies

The Sarbanes-Oxley (SOX) Act was passed by Congress in 2002 to address issues in auditing, corporate governance and capital markets that Congress believed existed. These deficiencies let to several cases of accounting irregularities and securities fraud. According to the Student Guide to the Sarbanes-Oxley Act many changes were made to securities law. A new federal agency was created, the entire accounting industry was restructured, Wall Street practices were reformed, corporate governance procedures were changed and stiffer penalties were given for insider trading and obstruction of justice (Prentice & Bredeson, 2010). Tenet Healthcare Corporation, one of the largest publicly traded healthcare companies in the US at the time, was accused

In the early 2000’s there were a series of financial scandals that took place by large companies such as Enron, Tyco, and WorldCom. The impact of these scandals was significant. Investors lost large amounts of money. Employees of the scandalous companies not only lost their jobs but lost their life savings. The financial scandals that had taken place were so severe that an Act was created in response to them in hopes to prevent these scandals from happening. The Sarbanes-Oxley Act, also referred to as SOX or Sarbanes-Oxley, was created by Senator Paul Sarbanes and Representative Michael Oxley and was signed into law by President George W. Bush on July 30, 2002. The creation and passing of the act was so tremendous that “in the opinion of most observers of securities legislation” Sarbanes-Oxley was “viewed as the most important new law enacted since the passage of the Securities and Exchange Act of 1934” (Ink.com 2008).

White collar crime has been around for ages. Today more and more news stories can be found where the elite, the top executives of fortune 500 companies, are being prosecuted for participating in illegal activities. It was hoped that the passing of the Sarbanes Oxley Act of 2001 after the Enron debacle would reduce the amount of illegal acts being committed in corporate America. The Sarbanes Oxley act makes executives personally responsible for their activities requiring top management to sign off on financial statements stating they are true and accurate and these executives can face jail time for committing fraudulent acts. Unfortunately, immorality in business is still running rampant. One illegal practice we see happening in

The Sarbanes-Oxley Act (SOX) was passed by Congress in 2002, and is administered by the SEC. The SEC checks for compliance and creates rules and requirements. The Act was created to restore investor confidence in financial statements after major accounting frauds, such as Enron, Tyco, and WorldCom. In addition, SOX aimed to prevent future accounting fraud through improving the accuracy of disclosures and through increasing corporate governance, accountability, and reliability.

The Sarbanes-Oxley Act, is an act passed by U.S. Congress on July 30, 2002. The primary reason was to protect investors from the possibility of fraudulent accounting activities by corporations. The act is commonly known as SOX Act. The act is named after its cosponsors, U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It mandates strict reforms to improve financial disclosures from corporations and prevent accounting fraud. The Sarbanes Oxley Act is arranged into eleven titles. They are Public Company Accounting Oversight Board (PCAOB), Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, White Collar Crime Penalty Enhancement, Corporate Tax Returns, and Corporate Fraud Accountability. These titles provide the description of specific requirements and mandates for the financial reporting. The SOX Act monitors compliance through various sections. However, the most significant sections are 302 (Disclosure controls), 401 (Disclosures in periodic reports), 404 (Assessment of internal control), 802 (Criminal penalties for influencing US Agency investigation/proper administration). As a result of SOX Act, the top management must individually certify the accuracy of financial information. The Act increased the oversight role of board of directors and the independence of the outside

Based on the video "Bigger Than Enron," discuss at least five features of the Sarbanes-Oxley Act (SOX) that are the result of events related to corporate fraud.

The Sarbanes-Oxley Act of 2002, also known as SOX in short, is a U.S. Federal Law passed by President George Bush. The main reason behind passing of the law was that the government needed improved regulations mandating upper management to confirm the reliability and transparency of the financial statements. This bill came about because of the failure and malpractice by companies such as Enron, WorldCom, Adelphia, and Arthur Anderson. These companies caused a major scandal where investors lost billions of dollars resulting in the public losing confidence in the U.S. Securities Market. “The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the Public Company Accounting Oversight Board, also known as the PCAOB.”[1] The act includes 11 sections that are enforced by the Securities and Exchange Commission.

The Sarbanes-Oxley Act was passed in 2002 as a response to a wave of corporate accounting scandals that damaged public trust in the controls of the US financial system. SOX therefore was created in order to create the framework for better control over accounting information and better accountability among members of senior management. Damianides (2006) notes that much of the burden of providing these tighter controls has fallen to IT departments. The Act not only sets out prescriptions for tighter internal controls, but effectively mandates that senior IT managers will need to communicate those controls to their CFO and CEO, as well as to external auditors.

In the wake of the major financial scandals, that occurred in 2001 and 2002 the United States Congress passed the Sarbanes Oxley Act (SOX) of 2002. These financial scandals adversely affected the public’s trust in the stock market, therefore passing the SOX helped investors to regain trust in investing in the stock market. Prior to the SOX being passed “neither management or auditors of publicly traded companies were required to evaluate, audit, or publicly report on the effectiveness of internal controls over financial reporting” (Kinney & Shepardson,

However, SOX was not the end of the story. 2008 ushered in, what is now

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.

After major corporate accounting scandals, especially from Enron and WorldCom, Congress enacted the Sarbanes-Oxley Act of 2002. It is a United States federal law that set corporate governance over U.S. Public Companies. The bill contains eleven sections which hold a public corporation’s board of directors’ accountable, created criminal penalties for certain misconduct, and created regulations to define how public corporations are to comply with the law. Even though it was enacted almost fifteen years ago there is still debate and controversy. Even now there is talk about Congressional Republicans aiming to loosen a provision of Sarbanes-Oxley, which was introduced in the Financial Choice Act by Jeb Hensarling (R., Texas), the chairman of the

The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.   In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.   Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a