The Sarbanes Oxley Act ( Sox )

1526 Words Jul 6th, 2015 7 Pages
Essay #1- Tax Advantages and Disadvantages of Sarbanes-Oxley
Eric Kitts
Liberty University Introduction
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 of corporate governance and their partaking in fraudulent activities and was meant to prohibit the proliferation of aggressive tax avoidance strategies and abusive tax shelters. SOX has been somewhat of a controversial Act since passed in 2002. Some feel it is a much needed resource to combat corporate scandal while others feel the implementation of the Act is overkill and counterproductive. This essay will discuss tax advantages of SOX, tax disadvantages of SOX, and provide insight as to how well SOX has combatted fraud and protected small businesses.
SOX Tax Advantages Before the implementation of SOX, with the help of familiar auditing firms, executives were able to cook the books and embezzle company money or receive payment amounts…

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