The Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley serve of 2002Introduction2001-2002 was marked by the Arthur Andersen accounting scandal and the get around of Enron and WorldCom. Corporate reforms were demanded by the government, the investors and the American humankind to prevent alike future occurrences. Viewed to be largely a result of failed or poor governance, insufficient disclosure practices, and a lack of capable internal controls, in 2002 George W. Bush signed into law the Sarbanes-Oxley Act that became effective on July 30, 2002. Congress was seeking to set standards and batten down the accuracy of financial reports.

Viewed as the most significant replace to securities laws since the 1934 the Sarbanes-Oxley Act (also known as SARBOX or SOX) sought to send for the public concerns through making corporeal board members prudent for company accounting statements, it redefines the relationships between corporations and their auditors, and it restructured the internal audit systems of public corporations. The SOX has redefined the merged accounting world since it was implemented by adopting grueling new provisions intended to deter and punish embodied and accounting fraud and corruption, threatening severe penalties for wrongdoers, and protecting the involvement of workers and shareholders.

Background on the Sarbanes-Oxley ActThe Sarbanes-Oxley Act was named after co-creators Senator Paul Sarbanes of atomic number 101 and Representative Michael Oxley of Ohio.



It was passed by congress in an attempt to bear upon confidence in American corporations after the multi-billion dollar scandals at Enron and WorldCom as mention above. The Act:?Creates a Public party Accounting Oversight Board (PCAOB), to enforce professional standards, ethics, and competency for the accounting profession;?Strengthens the independence of firms that audit public companies;?Increases corporate responsibility and usefulness of corporate financial disclosure;?Increases penalties for corporate wrongdoing;?Protects the objectivity and independence of securities analysts; and?Increases Security and Exchange instruction (SEC) resources.

By first establishing the PCAOB, the Act works jointly with the...

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