Because of numerous accounting scandals and many subsequent bankruptcies, the President and Congress have put into effect significant financial reform by the creation of the Sarbanes-Oxley Act of 2002 ("Act"). The purpose of this paper is to briefly analyze the impact the Act has on the business community.
To accomplish this purpose, this paper will briefly explore the circumstances leading to this legislation, discuss a brief summary of the main points of the Act, and analyze some of the ramifications for the corporate and accounting professions.
This paper examines the events that led to the need for a restructuring of the way companies account for their responsibilities to the public. A summary of the main points of the legislation that affects companies and accountants will be listed. Also discussed is the impact the Act has on the workload of the accountants and the increased costs for the businesses requiring compliance to the new legislation.
Important to this paper are the websites www.aicpa.org and www.sarbanes-oxley.com. Other reference material important to this paper, are cited in the endnotes.
SEC Securities and Exchange Commission. This is the United States governing body that has primary responsibility for overseeing the regulation of the securities industry.
CPA Certified Public Accountant. These are accounting professionals who have passed the Uniform CPA exam. Only CPAs are professionally licensed to provide to public, attestation opinions on publicly disseminated financial statements.
GAAP Generally Accepted Accounting Rules. These are the accounting rules used to prepare financial statements for publicly traded and private companies.
GAO General Accountability Office. This is the audit, evaluation, and investigative agency of the United States Congress.
AICPA The American Institute of... [continues]
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