The Tax Advantages Of Sarbanes Oxley Essay

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The Tax Advantages and Disadvantages of Sarbanes-Oxley Afua Nyamekye Liberty University The Tax Advantages and Disadvantages of Sarbanes-Oxley The 1990s and the early 2000s was a time that the world witness an explosion of fraud in the corporate world. Corporate fraud like Enron, HealthSouth, Waste Management, WorldCom, Lehman Brothers, etc. was so disturbing that lawmakers felt the need for a law to help curb down these frauds. Lawmakers came out with Sarbanes Oxley named after Senator Paul Sarbanes and Rep. Michael G. Oxley, the co-sponsors of the act. The purpose of this essay is to discuss some of the tax advantages and disadvantages of Sarbanes-Oxley and to explore whether the advantages outweigh the disadvantages for small businesses as well as the tax benefits for those businesses. The Tax Advantages of Sarbanes-Oxley The main objective of the Sarbanes-Oxley act was to reduce fraud. So far that objective seem to have been obtain. Since SOX was enacted, there has not been a major domestic corporate financial scandal uncovered other than the options back-dating scandal that occurred before July 2002 (Jahmani & Dowling, 2008). It is a tax advantage because companies and investors are not losing money. Another advantage of that resulted from Sarbanes-Oxley Act is that the meetings of audit committees increased in frequency. “One of the primary goals of SOX is to increase investor confidence and the assurance of the integrity of the U.S. capital

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