The Sarbanes Oxley Act ( Sox )

Congress enacted the Sarbanes-Oxley (SOX) Act of 2002 to restore investor confidence by requiring public companies to strengthen corporate governance through several mechanisms, including enhanced disclosure on Internal Control Over Financial Reporting (ICFR). As claimed by regulators, the disclosures on the effectiveness of ICFR are aimed at improving the quality of financial reporting, which would, in turn, reduce the information asymmetry for investors in U.S. capital markets” (Donaldson). Sarbanes- Oxley named after its creators, Senator Paul Sarbanes, D-Md and Congressman Michael Oxley, R-Ohio. Enacted in 2002 with the purpose to crack down on corporate fraud. The implementation of Sarbanes-Oxley led to the creation of the Public Company Accounting Oversight Board (PCAOB) to oversee the accounting industry. It was created to eliminate corporate fraud, and it put in place a ban on company loans to executives while also giving job protection to whistleblowers. Before SOX was put into place the accounts were a self-regulated profession, such as medical professionals and lawyers. This is what led to the fraudulent actions of major institutions, people can be greedy, and they need checks and balances to ensure the fidelity of the firm. There are criminal enhanced penalties for corporate fraud and related misdeeds, this brings justice to the sector as well as working as a deterrent for additional immoral

The audit profession is a relative new comer to the accounting world. The Industrial Revolution, with the growing business sector, was the spark that resulted in auditing techniques being sought out and utilized. Initially, audit techniques and methods were adopted by companies to control costs and detect fraud, which is more closely aligned with internal auditing. However, the need for mandatory oversight of public companies was recognized after the great stock market crash of 1929 (Byrnes, et al., 2012). This brought about the Securities and Exchange Act of 1934 creating the Securities and Exchange Commission (SEC). At that point, the SEC was tasked with

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.

Congress established the Sarbanes-Oxley Act of 2002, which is otherwise called the Public Company Accounting Reform and Investor Protection Act, in the beginning of corporate and accounting scandals that prompted liquidations, serious stock misfortunes, and a loss of trust in stocks (Batten, 2010). The demonstration forces new obligations on corporate administration and criminal authorizes on those supervisors who spurn the law, and it

Investors in publically trading companies should be protected from fraud, corruption and the intentional misleading by corporate executives concerning corporate finances. The Sarbanes-Oxley Act was passed on July 30, 2002 for the purpose of protecting investors from the risk of deceitful accounting practices by corporations. This paper discusses the background of the Sarbanes-Oxley Act of 2002 to include the when and why; as well as the intentions and purposes, and the process. It further addresses the arguments for and advantages of the law and the disadvantages. Lastly, this paper will speak to the impact of Sarbanes-Oxley in 2017 and beyond; containing the lawsuits, SOX for Not for profits and foreign countries.

Sarbanes-Oxley is an Act that was enacted in 2002. The enactment was undertaken by the United States Congress thus making it a federal law. In addition, this Act was supported by Michael Oxley and Paul Sarbanes, represents a gigantic change to government securities law (Franzel, 2014). The motivation behind the enactment was to ensure that there was a legal framework that could help deal with the increased number of major corporate and accounting scandals that had been witnessed in the United States. Various sections of this bill are concerned with the roles and responsibilities that have to be played by the board of directors.

The Sarbanes Oxley act of 2002(SOX), also known as the public company accounting reform and investor protection act was enacted as a reaction to a number of major corporate and accounting scandals. These scandals occurred in Enron Corporation, WorldCom, Tyco International, Adelphia and Peregrine Systems. These companies and corporations were looking very financial sound and very attractive to investors. However the investors did not know that the success of these companies were cause by false reports and artificial profits. Which cost investors billions of dollars when their share prices of affected companies collapsed. Also inadequate accounting practices, bankruptcies, accounting irregularities and inefficient audit were part of these frauds

Prior to 2002, there was very little oversight of accounting procedures. Auditors were not always independent and corporate government procedures and disclosure provisions were inadequate. Sometimes, executive compensation was tied to the stock of the company which created an incentive to manipulate the stock price by using fraudulent accounting practices to make it look like companies were making more money than they actually were. The Sarbanes-Oxley Act of 2002 was introduced because of the collapse of several major corporations due to these practices. This paper will

The Sarbanes-Oxley (SOX) Act of 2002 was legislated by Congress to restore reliability of financial statements with the objectives to raise standards of corporate accountability, to not only improve detection, but to also prevent fraud and abuse (Terando & Kurtenbach, 2009). Additionally, SOX was the response to general failure of business ethics such as the propagation of abusive tax shelters and greater aggressive tax avoidance strategies (Raabe, Whittenburg, Sanders, & Sawyers, 2015).

This research paper endeavors to expose how the Sarbanes- Oxley Act of 2002 might have led to the accountability of holding corporate executives for their actions in the past and also in the future. The paper will examine and explore the genesis of the Sarbanes-Oxley Act as well as give details on the act’s relationship to the ethics of the institution and the persons who work and manage the institution. The paper also proceeds to discuss different corporations around the globe that have been endorsed with the Sarbanes- Oxley Act and their subsequent benefits and demerits as opined by different individuals. The paper shall prove to be a relevant tool for any administrator managing a public company. Anyone going through this

The Sarbanes Oxley Act of 2002, better known as SOX, was passed in response to the scandals that had plagued many companies, from WorldCom to Enron, in the US. SOX was intended to restore investor confidence, decrease fraud and mismanagement while enhancing transparency and corporate governance (Ernst & Young). With the passing of SOX, the Public Company Accounting Oversight Board (PCAOB) was established to oversee the auditing firms that allowed, whether knowingly or not, these companies to commit fraud and fraud the American people out of their life savings (Harris). With all laws, there will always be some successes and failures. With that you will also have some who feel the law needs to be repealed or be reevaluated to decrease the

Since the passage of the Sarbanes-Oxley Act (SOX) of 2002, a large body of evidence has accumulated on the costs this legislation has imposed on public companies in the United States. Estimates of the direct costs of the law have been fairly straightforward to measure, but the indirect costs of the legislation like incremental audit and non-audit fees, additional audit effort and additional internal control audit expenses like payroll and technology are harder to estimate due to lack of detailed data on these expenses. Since audit fees had been

The main purpose of this research proposal will be to focusing on the Sarbanes-Oxley Act also known as SOX which was enacted on the 30th July 2002. The Sarbanes-Oxley Act was named after the two benefactors which are U.S Senator Paul Sarbanes and U.S Representative Michael Garver Oxley. This act was established after several high profile accounting scandals which occurred in the United States such as Worldcom and Enron the aim was to prevent such cases from occurring again in the future. To put the

Although the Sarbanes-Oxley (SOX) Act comes with many different benefits, the Act itself still consists of any major pros and cons. The SOX Act must review what needed to fix or changed due to the unfair to small companies. Therefore, it should be considering making improvements to other areas to ensures fair practices. Like many major businesses guidelines, the SOX Act should do its part to push to prevent conflict of interest. Although it has made significant improvement on the reliability of financial reporting for public traded companies and helping investors in today business world. It still need to assures the auditing process is fair and consistent to tighten the awareness of unethical practices. The SOX Act has already put major company

The Sarbanes Oxley Act (2002) passed after the Enron fiasco of the early 21st century. Enron was able to trick investors by using Special Purpose Entities which was allowed through GAAP standards, but nonetheless failed to reveal the potential risks to the investors looking at its financial records. “Enron 's executives had in fact fraudulently reported profits, but not debts, inflating its stock value and enabling it to obtain some capital from ignorant financial institutions and other investors.” (Kaal, 2016) Therefore, the passing of the SOX Act provided two main points, the Public Company Accounting Oversight Board and Title IV. PCAOB holds public accounting firms accountable. PCAOB works in conduction with other CPA organizations, but it holds the ultimate authority over CPA organizations. Title IV requires the full disclosure for any Special Purpose Entities and the impact that they might have. Also pro forma calculations, figures based on future events that might occur, and personal loans to