This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government's and the Security and Exchange Commission's concern in promoting ethical standards in terms of financial disclosure in the corporate environment. This paper addresses the current criticism of the exportation of U.S. corporate governance norms under the Sarbanes-Oxley Act, focusing on the application of the audit committee requirement to foreign issuers from European countries with codetermination laws, and the prevention of loans to executives with respect to German issuers. In reply to such criticism, the Securities and Exchange Commission (SEC) has already granted foreign issuers several limited exemptions from the Act, as well as an exemption dealing with the audit committee independence requirement, motivated by the desire to reattract foreign companies that canceled listings in the U.S. in response to the Act. This paper provides additional legal and economic justifications favoring the exclusion of foreign companies from the audit committee and loan prohibition requirements. Corporate greed and corruption has altered the face of American business forever. Corporate greed was the primary reason in the downfall of Global Crossing, Enron and MCI WorldCom. The paper shows that the governing bodies, the Senate, NASD, the Securities and Exchange Commission and other powers that be decided to act and in 2002, the Senate introduced the Sarbanes-Oxley Act of 2002. The paper discussed how this new law impacts CPA's, CPA firms auditing public firms, publicly traded firms and their employees. The paper looks at the mission and purpose of the law and examines its affect on the accounting industry. GENERAL DISCUSSION
The Sarbanes-Oxley Act, enacted as a reaction to the WorldCom, Enron, and other corporate scandals, improved the regulatory protections presented to U.S. investors by adding an audit committee requirement, intensification of auditor independence, increasing disclosure requirements, prohibiting loans to executives, adding a certification requirement, and strengthening criminal and civil penalties for violations of securities laws. The Act was criticized for being made appropriate to all foreign issuers listed on a U.S. exchange, even though several of the behavior the Act targeted was either a non-issue in foreign countries or was already efficiently regulated. According to Fraser, I. (Oct., 2002) this broad extraterritorial scope is particularly problematic given that the SEC has encouraged foreign issuers to enter U.S. capital markets by providing several accommodations to foreign practices and polices not inconsistent with the protection of U.S. investors. Foreign companies dispute that, as of the end of 2001, more than 1,300 foreign issuers had entered U.S. capital markets and became reporting companies in reliance on the SEC's accommodations. According to Bostelman, J. T. (2004), not all of the Sarbanes-Oxley provisions are controversial for foreign issuers. Provisions consistent with foreign regulation and which do not entail additional burdens on foreign issuers, for instance the executive certification requirement, have not raised much publicity. At the same time, provisions attempting to entail additional burdens in areas in which foreign issuers are already regulated by their country of incorporation have involved more criticism. Along with the provisions imposing additional burdens on foreign issuers, the mainly debated one is the provision requiring an independent audit committee. As explained by Silverman, L. N., (Sept., 2003), issuers incorporated under civil law regimes dislike this provision for the reason that it indirectly strengthens labor's bargaining power by giving...
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