The Sarbanes-Oxley Act of 2002

Also the Securities Acts of 1933 and 1934 rival the SOX act in its effects on public accounting, corporate governance, and financial disclosure. By the year 2002 former President George Bush signed the act producing a change of reforms that were obligated by the act which ultimately became public law.

The main objective of the Sarbanes-Oxley act was to reduce fraud. So far that objective seem to have been obtain. Since SOX was enacted, there has not been a major domestic corporate financial scandal uncovered other than the options back-dating scandal that occurred before July 2002 (Jahmani & Dowling, 2008). It is a tax advantage because companies and investors are not losing money.

The Sarbanes-Oxley Act of 2002 (SOX), also known as the Public Company Accounting Reform and Investor Protection Act and the Auditing Accountability and Responsibility Act, was signed into law on July 30, 2002, by President George W. Bush as a direct response to the corporate financial scandals of Enron, WorldCom, and Tyco International (Arens & Elders, 2006; King & Case, 2014;Rezaee & Crumbley, 2007). Fraudulent financial activities and substantial audit failures like those of Arthur Andersen and Ernst and Young had destroyed public trust and investor confidence in the accounting profession. The debilitating consequences of these perpetrators and their crimes summoned a massive effort by the government and the accounting profession to fight all forms of corruption through regulatory, legal, auditing, and accounting changes.

The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and covers and sets new performance standards for boards of directors and managers of companies and accounting mechanisms of all publicly traded companies in America. It also introduces criminal liability for the board of directors and a requirement by

In reaction to a number of corporate and accounting scandals which included Enron Congress passed The Sarbanes-Oxley Act of 2002 (SOX) (Sarbox) also known as the "Public Company Accounting Reform and Investor Protection Act” and the "Corporate and Auditing Accountability and Responsibility Act" was enacted July 30, 2002. The Sarbane-Oxley Act is a US federal law that created new and expanded laws regarding the requirements for all US public company boards, management, and accounting firms. The act has a number of provisions that apply to privately owned companies. The Act addresses the responsibilities of a public corporation’s Board of Directors, adds criminal penalties for misconduct, and requires the SEC to create regulations that define how public corporations are expected to comply with the law. The SOX increases the penalties a company pays for fraudulent financial activity, and requires top management to provide individual verification to certify the accuracy of financial information, while also increasing the oversight role of a company’s Board of Directors and the independence of outside auditors.

The Sarbanes-Oxley Act of 2002 was created by Congress in response to financial scandals. There were several incidents which contributed to the need for legislature such as SOX. For purposes of brevity, the focus here will be on two of the largest financial scandals leading up to the passage of SOX, which are of those of Enron and WorldCom.

The Sarbanes-Oxley Act was enacted in response to a series of high-profile financial scandals that occurred in the early 2000s at companies including Enron, WorldCom and Tyco that rattled investor confidence. The act, drafted by U.S. Congressmen Paul Sarbanes and Michael Oxley, was aimed at improving corporate governance and accountability.

Senators Paul Sarbanes and Michael Oxley were the sponsors of the Sarbanes-Oxley Act of 2002, which represented a tremendous change to federal securities law. The act was signed into law by president George W. Bush who described it as “the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt1.” After the financial scandals implicating Enron, WorldCom and Global Crossing, the public needed to restore their trust in the public financial statements of the companies and that’s where the SOX Act of 2002 came into place. The act is composed of eleven titles which require numerous reforms to prevent accounting fraud, increase corporate responsibilities, among others.

The Sarbanes Oxley act of 2002(SOX), also known as the public company accounting reform and investor protection act was enacted as a reaction to a number of major corporate and accounting scandals. These scandals occurred in Enron Corporation, WorldCom, Tyco International, Adelphia and Peregrine Systems. These companies and corporations were looking very financial sound and very attractive to investors. However the investors did not know that the success of these companies were cause by false reports and artificial profits. Which cost investors billions of dollars when their share prices of affected companies collapsed. Also inadequate accounting practices, bankruptcies, accounting irregularities and inefficient audit were part of these frauds

The Sarbanes Oxley Act came to existence after numerous scandals on financial misappropriation and inaccurate accounting records. The nature of scandals made it clear there are possible measure that could be used to prevent future occurrence of financial scandals. And the existence and effectiveness of Sarbanes Oxley has caused

The Sarbanes-Oxley Act of 2002 was created in reaction to the increasing number of accounting fraud scandals in the late nineties and early 2000 's. One example of an accounting scandal that occurred was Enron. Andrew Fastow, the CFO at the time, created phony partnerships and companies, keeping separate books for these companies. He convinced some of the major banks to invest in these companies. The Vice-President at the time, Sharon Watkins, discovered these fraudulent accounting treatments, effectively becoming a whistleblower. The fraud at Enron also caused the end of the accounting firm Arthur Anderson, which was the firm that audited the financial statements of Enron. Sarbanes-Oxley no longer allows top executives to place blame on other employees, as they are now required to sign-off on all financial statements, meaning the executives agree with all accounting treatments.

On July 30, 2002, the Sarbanes – Oxley Act was developed to help protect the public from fraud within corporation. However, it was created because positive solutions were needed after the issues from fraudulent accounting practice. For example the Enron, Tyco, and WorldCom scandals and the questions concerning governance in American Corporations that occurred in

I think that the Sarbanes Oxley Act of 2002 (SOX) has been feasible in managing tricky financial reporting from major corporations. It has a much lower influence on the misappropriation of benefits. No law or Act have the ability to cover all human predisposition to endeavor relationships with good offense. The law made it harder to quote out of context the association's cash related affairs and made the results more extraordinary (Ferrell, Fraedrich, & Ferrell, 2013). SOX have increased auditor’s vigilance and tightened management's responsibility for reporting misappropriating assets (Church & Shefchik, 2012). Here are two reasons I trust SOX was successful. First, this Act was powerful enough to cause chief executives to consider money

The Sarbanes-Oxley Act was enacted in response to a series of high-profile financial scandals that occurred in the early 2000’s at companies including Enron, WorldCom, and Tyco that rattles investors’ confidence (Sarbanes-Oxley Act/SOX, n.d.). The Sarbanes-Oxley Act better known as SOX was drafted by U.S. Congressman Paul Sarbanes and Michael Oxley and was put forth to improve corporate governance and accountability (Sarbanes-Oxley/SOX, n.d.). Now, all companies must be governed themselves accordingly (Sarbanes-Oxley/SOX, n.d.).

Sarbanes-Oxley Act was passed in 2002 by former president George Bush. Essentially to combat the Enron crisis. The Sox Act basically has regulatory control and creates an enviroment that is looking out for the public. Ideally this regulatory environment protects the public from fraud within corporations. Understanding, that while having this regulatory control at times the Sox requirements need to be tweaked or amended. Not only now but in the future as well. The main aspects of the Sox act are essentially looking out for our welfare as a consumer. Our government has the obligation to regulate