Sarbanes-Oxley Act of 202
Sarbanes-Oxley Act of 2002
Kelon Thompson
ACC 561
September 23, 2014
Dr. Martin Armstrong
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 after the United States corporate financial crisis. Sarbanes-Oxley Act can also be acknowledged by its official name, Public Company Accounting Reform and Investor Protection Act of 2002. Sarbanes-Oxley Act was named after its sponsors, Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It is recognized as the most important U.S. federal disclosure and corporate governance legislation since the Securities Act and Securities Exchange in the 1930s. It is mostly understood as a process that implemented major reforms on the particular schedule specified by Congress. Many large companies such as Arthur Anderson, Enron, and WorldCom were affected. The Enron and WorldCom disasters offered the motivation from the community outrage that required many of the on hand reform proposals into effect for publicly traded companies. Many of these existed for years lacking adequate political authority to be passed. The Act provides a solid foundation of government rules that are targeted to punish corporate, accounting fraud, and corruption. The SOX is aimed to carry out its tasks by imposing severe penalties for corporate wrong doings, while protecting the interest of workers and shareholders.
The main purpose of the Sarbanes Oxley Act was to form an liable system of regulations and policies that ultimately ensures proper compliance during corporate financial disasters. The deadlines and standards that SOX puts into order are primarily in response to the shocking amount of corporate and accounting scandals. With hopes of restoring the rest of the country’s faith in the capital market, the government-enacted legislation was divided into eleven sections that varied from additional penalties to the establishment of new accounting oversight from the Public Company
Kelon Thompson
ACC 561
September 23, 2014
Dr. Martin Armstrong
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 after the United States corporate financial crisis. Sarbanes-Oxley Act can also be acknowledged by its official name, Public Company Accounting Reform and Investor Protection Act of 2002. Sarbanes-Oxley Act was named after its sponsors, Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It is recognized as the most important U.S. federal disclosure and corporate governance legislation since the Securities Act and Securities Exchange in the 1930s. It is mostly understood as a process that implemented major reforms on the particular schedule specified by Congress. Many large companies such as Arthur Anderson, Enron, and WorldCom were affected. The Enron and WorldCom disasters offered the motivation from the community outrage that required many of the on hand reform proposals into effect for publicly traded companies. Many of these existed for years lacking adequate political authority to be passed. The Act provides a solid foundation of government rules that are targeted to punish corporate, accounting fraud, and corruption. The SOX is aimed to carry out its tasks by imposing severe penalties for corporate wrong doings, while protecting the interest of workers and shareholders.
The main purpose of the Sarbanes Oxley Act was to form an liable system of regulations and policies that ultimately ensures proper compliance during corporate financial disasters. The deadlines and standards that SOX puts into order are primarily in response to the shocking amount of corporate and accounting scandals. With hopes of restoring the rest of the country’s faith in the capital market, the government-enacted legislation was divided into eleven sections that varied from additional penalties to the establishment of new accounting oversight from the Public Company
References: Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Accounting: Tools for business decision making (4th ed.). NJ: John Wiley & Sons. De Vay, D.L. (2006). The Effectiveness of the Sarbanes-Oxley Act of 2002 in Preventing and Detecting Fraud in Financial Statements (1st ed.). Dissertation.