Sarbanes Oxley Act

Topics: U.S. Securities and Exchange Commission, Enron, Public company Pages: 4 (1315 words) Published: July 1, 2013
BUS 216
Project: Research the Sarbanes-Oxley Act of 2002

Sarbanes-Oxley Act of 2002 is one the most significant group of rules administered by government. (Rizvana Zameeruddin, n.d)“Hailed as the most significant change to securities laws since the 1934 Securities Exchange Act, a new penal law, 18 U.S.C. §§1348, an act commonly known as the Sarbanes-Oxley Act of 2002, was signed into law by George W. Bush and became effective on July 30, 2002”. Act includes wide-ranging amendments to legal entities of publicly traded securities. It has been governed by the Securities and Exchange Commission/ SEC, which is the one who decides on time frames and limits on agreements, issues rules on conditions and concerns, and specifies which records will be stored and for how long. (("," n.d.): “SOX addresses to all public American companies and international companies that registered equity or debt securities with the Securities and Exchange Commission and accounting firms that provide auditing services to them”. It’s a legislation executed in regards to Enron and WorldCom financial scandals in order to secure shareholders and general public from accounting errors and false processes in enterprise. It’s been also designed to refrain and punish all frauds and corruption, by enforcing penalties, and protecting workers and shareholders. Private companies which don’t accomplish all SOX standards may deal also with difficulty in raising capital, civil liability, or even loss of customers and investors. Formed to correct aspect of financial reporting, auditing, and any accounting activities for public companies, and marked in A New Ethic of Corporate Responsibility, (Rizvana Zameeruddin , n.d.):“The Act creates a Public Company Accounting Oversight Board to enforce professional standards, ethics, and competence for the accounting profession. It enhances and stabilizes independence of firms auditing public companies, increases corporate responsibility and usefulness...
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