Sarbanes-Oxley Act of 2002 was designed to control the record keeping systems that businesses are required to maintain.The Act
was passed to combat the slew of financial scandals that were committed by large companies like WorldCom and Enron.
Do you think that this massive accounting reform law passed by Congress was really necessary
The simple answer is yes.
The Sarbanes-Oxley Act was introduced after a prolonged period of corporate scandals in the United States from 2000 to 2002. It was enacted in July 2002 to restore investors' confidence in the financial markets and close loopholes that allowed public companies to defraud investors. The act had an intense effect on corporate governance in the U.S. The Sarbanes-Oxley Act requires public companies to form and strengthen the audit committees, incorporate strong internal controls and ensure it's efficiency and effectiveness. It also made directors and officers personally liable for accuracy of financial statements, and strengthen disclosure. The Sarbanes-Oxley Act also establishes stricter criminal penalties for securities fraud to restore the public confidence in listed companies.
The Act is so important as it has dramatically changed how corporations operate within the U.S. Because of provisions within the Act such as the requirement that public companies create audit committees for their organization as well as criminal penalties for lying about a company's financial position and data wherein chief executive officers (CEOs) and chief financial officers (CFOs) must certify the accuracy of the financial data, and criminal penalties for destroying or concealing evidence of a financial fraud or any financial documents under request by government investigators, companies can't operate similar to how they did before the passage of this Act.
Other important factors associated with this Act includes the creation of the Public Company Accounting Oversight Board, which actually possesses the power to enforce sanctions and start investigations against companies that are not in compliance with the Act.
Sarbanes-Oxley Act of 2002 was designed to control the record keeping systems that businesses are required...
Sarbanes-Oxley Act of 2002 was designed to control the record keeping systems that businesses are required to maintain.The Act was passed to combat the slew of financial scandals that were committed by large companies like WorldCom and Enron. Do you think that this massive accounting reform law passed by Congress was really necessary?
US Sarbanes-Oxley Act passed in the wake of a myriad of corporate scandals. What these scandals had in common was skew reporting of selected financial transactions. For example, companies such as Enron, WorldCom and Tyco, covered up or misrepresented a variety of questionable transactions, resulting in huge losses to stakeholders and a crisis in investor confidence. Sarbanes-Oxley aims to enhance corporate governance and strengthen corporate accountability. Has SOX live up to its expectations over the last decade, and should there...
The Sarbanes-Oxley (SOX) Act was enacted in 2002 for companies in the private sector as a result of the Enron and other scandals. However, it does not apply to government. Should SOX-like provisions be required for the federal government? Has there been any move in this direction? Why or why not?
In light of the 1990s accounting scandals and the eventual Sarbanes Oxley Act of 2002, and the following financial institution meltdown, and our current accounting environment do you expect the United States Congress to have concerns about enacting laws pertaining to accounting standards in the near future? Why and why not?
The Sarbanes-Oxley Act, passed in 2002, does NOT require companies _____. to report whether they have adapted a code of ethics to adhere strictly to accounting rules to choose more outside board of directors to improve and maintain investor confidence to choose more inside board of directors
V Fraud is an international act to misappropriate (steal) assets to misstate financial statements. There are many documented high-profile collapses of companies due to fraud. As the Enron and WorldCom scandals unfolded, many people asked, “How can these things happen? If such large companies that we have trusted commit such acts, how can we trust any company to be telling the truth in its financial statements? ? Where were the auditors?” These scandals caused the creation of the Sarbanes-Oxley Act...
Which of the following is required by the Sarbanes-Oxley Act of 2002? a. A report on internal control b. A vertical analysis c. A common-sized statement d. A price-earnings ratio
The point of the Sarbanes Oxley Act of 2002 was to increase transparency of financial statements while also including prevention methods. Which section do you think is an effective deterrent to accounting fraud?
Discuss the major components of the Sarbanes-Oxley Act of 2002 and Corporate Governance? Counterpoint: According to Romano (2004), the Sarbanes-Oxley Act (SOX), in which Congress introduced a series of corporate governance initiatives into the federal securities laws are not just a considerable change in law but also a departure in the mode of regulation. The federal regime had until then consisted of disclosure requirements, rather than substantive corporate governance mandates, which were traditionally left to state corporate law and were...
Sarbanes-Oxley Ten Years Out Ten years has passed since the passage of the Sarbanes-Oxley Act of 2002, and to date, the SEC—the organization in charge of prosecuting violations of the law—has filed cases against only 20 companies accused of violating the act. The backbone of the act was increased responsibility placed on company executives. The act allows the SEC to seize pay from the CEOs and CFOs of companies found to have filed fraudulent financial statements, even if the executives...