The Sarbanes Oxley Act ( Sec )

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In July 2002, the United State Congress passed a legislation known as the Sarbanes-Oxley Act (often shortened to SOX). The act was drafted by United States congressmen Paul Sarbanes and Michael Oxley and was aimed at improving corporate governance and accountability. This legislation was passed to protect the general public and shareholders from fraudulent practices and accounting errors in the enterprise, in addition to improving the accuracy of corporate disclosures. The United States Securities and Exchange Commission (SEC) administers the act, which sets publishers rules on requirements and deadlines for compliance (Rouse, n.d.).
Company and Scandal Background
The Sarbanes-Oxley Act was enacted in response to a chain of high profile financial scandals that happened in the early 2000s at companies including Tyco, Enron and WorldCom that shook investor confidence (Rouse, n.d.).
Enron. Enron was once ranked the sixth largest energy company in the world, however, in October 2001 it’s fate changed and it took a turn for the worse. The Enron Scandal came to light, which led to the bankruptcy of the Enron Corporation and the dissolution of Arthur Andersen, one of the five largest audit and accountancy partnerships in the world. Along with being the largest bankruptcy reorganization in American history at that time, Enron is undoubtedly known as the biggest audit failure (“Enron scandal,” n.d.).
Enron was an American energy company based in Houston, Texas and was
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