The Sarbanes Oxley Act ( Sox )

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The Sarbanes-Oxley Act (SOX) was put into legislation on July 30, 2002 by President George W. Bush, for the purpose of regulating the financial practices and a host of other corporate and securities issues for all publically traded organizations. “Essentially, it was an attempt to impose tighter controls on the financial reporting, to try and provide more transparency in financial reporting, and to hold people accountable in the financial reporting.” (Dewey, 2012). It’s important to note that the SOX law applies to all companies registered under Section 12 of the Securities and Exchange Act of 1934. Privately held and non-for profit companies are not impacted by the SOX law, however many have elected to voluntarily comply with the legislation. The law was enacted due to several corporate scandals in early 2000-2002; Enron, WorldCom and Tyco to name just a few. The early 2000’s will always be remembered for the deep recession and decline in economic activity, not just in the US, but in the global marketplace as well. As with any legislation, there are pro’s and con’s. I believe the law was the right thing to enact; the problem many see with it is the manner in which it was mandated. Many would even argue that the law was not needed since we already have laws in place to protect and prosecute fraudulent behavior, but those were clearly not strict enough given the billions of dollars that investors lost. I’m sure in the near future, we’ll see that SOX doesn’t

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