Question

Do you think that the Sarbanes Oxley (SOX) Act of 2002 has been good for investors? Include at least one corporate regulation brought about by SOX in your answer.

Answer 1

IF ANY QUERY, FEEL FREE TO ASK Solution Due to Corporate scandal during 2000 to 2002, Investors lost faith in Corporations. To restore the faith of Investor in corporation Sarbanes Oxley (SOX) Act of 2002 was implemented. So, Yes it is good for the investors. Corporate regulation brought by Sarbanes Oxley (SOX) Act of 2002 are: - Increase in power of audit committee - Audit committee have to oversee management decisions. It is now involved in appointment of internal and external auditor, reviewing financial statements and managing complaint about top management. Responsibility on Management - Management are responsible for financial statements. They are responsible for the accuracy of the financial statements. There are harsh penal and imprisonment provision if inaccurate statements are produced. Internal audit report - It require corporate to do internal audit check by external auditor, who shall provide report effectiveness of internal control.