Sarbanes-Oxley Act Essay

The Sarbanes-Oxley Act (SOX) was passed by Congress in 2002 as a response to large corporate accounting fraud scandals that resulted from blatant abuse of self-regulation. SOX “is the most far-reaching and significant new federal regulatory statute affecting accountants and governance since the Securities Acts of 1933 and 1934” (Wegman, 2007). The main goal of SOX was to protect investors from fraud by strengthening oversight and improving internal control. In the discussion below are the advantages

Internal controls also help to zoom in on errors or unintentional mistakes. When these errors are picked up on early it eliminates future problems for the company and its investors down the road. The Sarbanes Oxley Act of 2002 is what enforces such internal controls of companies. This Act requires all United States companies to follow internal control guidelines and standards. Many argue

company’s financial information hinges on its internal control of effectively adhering to governing regulations. According to Epstein (2014) the Sarbanes-Oxley Act of 2002 was established to eradicate companies from submitting fraudulent financial reporting. “The Sarbanes-Oxley Act changes management’s responsibility for financial reporting significantly. The act requires that top mangers personally certify the accuracy of financial reports” Blokhin (2018). This improves the quality of financial information

companies such as Enron, WorldCom, and Tyco International consumers became aware that something needed to change. As a result, Congress passed the Sarbanes-Oxley Act (SOX). SOX gave the public and investors a renewed confidence and strengthen corporate governance to insure that companies are reporting their financial information correctly and accurately. The act requires management and independent auditors to continuously evaluate a firm’s internal financial-reporting controls on a yearly base. Furthermore

DISADVANTAGES OF SARBANES-OXLEY Name Institution Date The Tax Advantages and Disadvantages of Sarbanes-Oxley The Sarbanes-Oxley is an Act passed by the U.S congress in the year 2002. Its main aim was to protect investors from exposure to fraudulent activities through accounting activities by United States corporations. Due to the increase in fraudulent activities by large corporationssuch as Enron Corporation at the turn of the 21stcentury, the United States congress passed the Act. However, this

The Sarbanes-Oxley Act Overview: The development of the Sarbanes-Oxley Act (SOX) was a result of public company scandals. The Enron and Worldcom scandals, for example, helped investor confidence in entities traded on the public markets weaken during 2001 and 2002. Congress was quick to respond to the political crisis and "enacted the Sarbanes-Oxley Act of 2002, which was signed into law by President Bush on July 30" (Edward Jones, 1), to restore investor confidence. In reference to SOX, penalties

At the turn of the 21st century, more fraud and scandals ensued, therefore more actions were required in order to crack down on the issues surrounding financial reporting. The Sarbanes – Oxley Act (SOX) 2002 was established, in order to enforce corporate governance rules for publicly traded companies (Schroeder et al, 2011). The SOX added more constraints on corporations, making executives and managers more accountable for their actions and financial reporting. The SOX also, established the Public

involved in some sort of corruption. These corporations misfortunate mishaps was the driving force for the implementation of ethical laws. One law in particular was the Sarbanes-Oxley Act (SOX). This law was enacted to help restore integrity and public confidence to the financial markets (Orin, R. 2008). The Sarbanes-Oxley Act is not a law that is new to the scene of corporate America, in fact in 1934 the Securities and Exchange Commission was introduced to help police the U.S. financial markets

Sarbanes Oxley Act Research Project Brielle Lewis MBA 315 March 6, 2014 I. Abstract The purpose of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities law, and for other purposes. (Lander, 2004) The Act created new standards for public companies and accounting firms to abide by. After multiple business failures due to fraudulent activities and embezzlement at companies such as Enron Sarbanes and

The Sarbanes-Oxley Act also helped managers see that their companies had many weaknesses, such as “lack of enforcement of existing policies, unnecessary complexity, clogged communications, and a feeble compliance culture” (2006), per the Harvard Business Review. Managers and executives could recognize their company’s weaknesses because SOX requires publicly traded companies to be standardized. Section 302 explains the corporate responsibility behind the financial reports, such as how the CEO and