Sarbanes-Oxley Act of 2002
October 6, 2014
La Toyia Tilley
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act was established in 2002 and has initiated extensive transformation to the parameter of economic practice and shared bureaucracy. Nevertheless, it was named after Legislator Paul Sarbanes and Representative Michael Oxley, who were the founders, given it the title Sarbanes-Oxley Act of 2002. On July 30, 2002, President George Bush signed off on SOX, revising the security laws that, moderately, reevaluate the responsibility of accountants. Although the focal point of this statute is on shared organizations, it is projected that banks and investors, who necessitate reviewed reports of the company’s finances, will inflict several stipulations that the Sarbanes-Oxley Act puts on shared organizations than on non-shared organizations. Nonetheless, it is also anticipated that the FASB and the Auditing Standards Board will implement a chain of contemporary auditing and computing prerequisite that will not be finite to shared organization. The SOX is a very convoluted and influential part of the statute that should do much to enhance the fiscal coverage of businesses. Optimistically, this enhanced economic coverage will generate permanence in the marketplace permitting stockholders and investors to be proficient to put their trust in the written word and numbers (Schlesinger, 2002). The Sarbanes-Oxley Act of 2002 is prearranged into eleven titles and of course all is of importance, but there are different sections that are essential when it concerns compliance and protecting the public from fraud within corporations. The sections are 302, 401, 404, 409, and 802. There is an explanation of each section. Sarbanes-Oxley Act Section 302 is the section that is relevant to the Corporate Responsibility for Financial Reports. These reports are to include the representatives’ signature showing that the reports were reviewed. The financial report does not seem to be misleading, omitting materials that will be of importance, or have statements that are fictitious. The fiscal reports and other information that is relative present all financial results pertaining to the business. Also, the authorizing representatives are liable for internal controls and have assessed these internal controls prior to the ninety days and have disclosed on their results. Section 302 of the Sarbanes-Oxley Act should provide a record of all deficits in the internal controls and data on any misrepresentation that engrosses staff members who are engaged with the internal actions. Furthermore, any important transformations in internal controls or issues linked that could have a pessimistic influence on the internal controls. These requirements may not be attempted by the companies who reincorporate or convey their activities outside the United States (The Sarbanes-Oxley Act 2002, n.d). Sarbanes-Oxley Act Section 401 is the section that is relevant to Disclosures in Periodic Reports. This section of the fiscal reports are disclosed by the issuer and should be precise and presented in a way that does not include inaccurate reports or declare to avow significant data. These fiscal reports must also consist of all off-balance sheet, business transactions, liabilities, and obligations. Nevertheless, the Commission was obligated to describe and analyze on the level of off-balance business deals ensuring clear coverage. Also, the Commission is obliged to decide whether GAAP or other parameters causes direct and momentous reporting by issuers (The Sarbanes-Oxley Act 2002, n.d). Sarbanes-Oxley Act Section 404 is the section that is relevant to Management Assessment of Internal Controls. In this section, issuers are obligated to distribute data in their yearly reports regarding the sufficiency and extent of the internal control formation and processes for fiscal reporting. Also, this report should evaluate the efficiency of...
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Rouse, M. (n.d). What is Sarbanes-Oxley Act (SOX)?-Definition from WhatIs.... Retrieved from http://searchcio.techtarget.com/definition/Sarbanes-Oxley Act
Schlesinger, M. (2002). Sarbanes-Oxley Act. Business Entities, 4(6), pg.42.
The Sarbanes-Oxley Act 2002. (n.d). Retrieved from http://www.soxlaw.com/
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