This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government's and the Security and Exchange Commission's concern in promoting ethical standards in terms of financial disclosure in the corporate environment.
This paper addresses the current criticism of the exportation of U.S. corporate governance norms under the Sarbanes-Oxley Act, focusing on the application of the audit committee requirement to foreign issuers from European countries with codetermination laws, and the prevention of loans to executives with respect to German issuers. In reply to such criticism, the Securities and Exchange Commission (SEC) has already granted foreign issuers several limited exemptions from the Act, as well as an exemption dealing with the audit committee independence requirement, motivated by the desire to reattract foreign companies that canceled listings in the U.S. in response to the Act. This paper provides additional legal and economic justifications favoring the exclusion of foreign companies from the audit committee and loan prohibition requirements.
Corporate greed and corruption has altered the face of American business forever. Corporate greed was the primary reason in the downfall of Global Crossing, Enron and MCI WorldCom. The paper shows that the governing bodies, the Senate, NASD, the Securities and Exchange Commission and other powers that be decided to act and in 2002, the Senate introduced the Sarbanes-Oxley Act of 2002. The paper discussed how this new law impact...
... middle of paper ...
...ey Act of 2002)(Book Review): An article from: Strategic Finance" This digital document is an article from Strategic Finance, published by Institute of Management Accountants on May 1, 2004. The length of the article is 1012 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Prentice, R. A. (Nov., 2004) "Guide to the Sarbanes-Oxley Act: What Business Needs to Know Now That it is Implemented" Enron was once the seventh largest company on the Fortune 500, but after the greatest business scandal of a generation and one of the biggest of the last century, Enron took bankruptcy and essentially blinked out of existence following a wave of revelations of accounting regularities and securities fraud.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- In 2002, Senator Paul Sarbanes (a Democrat from Maryland) and Congressman Michael Oxley (a Republican from Ohio) crossed the aisle to develop a new law to further regulate the accounting, auditing and financial reporting of companies publicly traded in United States. The Sarbanes-Oxley Act of 2002 (SOX) (also known as the Public Company Accounting Reform and Investor Protection Act of 2002) passed because of the demand of the American people to see reform in response to the widely publicized instances of fraud and corruption in large US companies.... [tags: fraud, corruption, financial scandals]
1741 words (5 pages)
- Introduction Ethics are characteristics or values that are not inherently instilled within individuals but are developed over a lifetime through experience. Ethical behavior is thereby a choice. According to Northcentral University’s Executive Concepts in Business Strategy, business ethics are “standards and guidelines regarding the conduct of commerce and apply to individuals, companies, and professions” (p. 543). By this definition, morals and ethical values are subjective to the decisions made by the persons involved in the business.... [tags: unethical behavior, business practices]
1108 words (3.2 pages)
- ABSTRACT This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government's and the Security and Exchange Commission's concern in promoting ethical standards in terms of financial disclosure in the corporate environment. This paper addresses the current criticism of the exportation of U.S.... [tags: Business Regulation Accounting]
1866 words (5.3 pages)
- Sarbanes-Oxley Act (SOX) Name Name of Institution Introduction The Sarbanes-Oxley Act is a legislation aimed at increasing the accuracy of financial statements that were issued by companies that are publicly held (Livingstone, 2011). The passing of this act was a response to some of the financial malpractices that took place at companies such as WorldCom and Enron. According to Livingstone, making ethical decisions is critical because ethical lapses can lead to severe unforeseen consequences (Livingstone, 2011).... [tags: Legislation, Financial Malpractice]
1444 words (4.1 pages)
- Dodd-Frank and Sarbanes-Oxley Acts: Dodd-Frank and Sarbanes-Oxley Acts are important legislations in the corporate world because of their link to public and privately held companies. Sarbanes-Oxley Act was enacted to enhance transparency and accountability in publicly traded companies. On the contrary, Dodd-Frank Act was enacted to disentangle the confused web of financial service company valuations. Actually, these valuations are usually hidden by complex and unclear financial instruments. The introduction of Sarbanes-Oxley Act was fueled by recent incidents of accounting frauds by top executives of major corporations such as Enron.... [tags: private and public companies]
836 words (2.4 pages)
- The Sarbanes-Oxley Act of 2002 is the most significant Federal law that impacts public companies to be introduced since the Securities Acts of 1933 and 1934. This legislation set new or enhanced standards for all U.S. public company Board of Directors, top management, and the public accounting firms that audit public companies. The Sarbanes-Oxley Act of 2002 (“SOX”) was introduced in response to a number of accounting scandals around the turn of the millennium, including Enron, Tyco, and WorldCom.... [tags: United States federal law]
601 words (1.7 pages)
- Introduction In July of 2002, Congress swiftly passed the Public Company Accounting Reform and Investors Protection Act at the time when corporations like Arthur Anderson, Enron and WorldCom fell due to fraudulent accounting practices and bad internal control. This bill, sponsored by Mike Oxley (R-OH) and Paul Sarbanes (D-MD), became known as Sarbanes-Oxley Act (SOX).It sought to restore public confidence in publicly traded companies and their accounting practices, though the companies listed above were prosecuted on laws that were already in place before SOX.... [tags: accounting, cost, law, efficiency, market, economy]
1765 words (5 pages)
- INTRODUCTION In the wake of high-profile corporate accounting debacles, authorities have started to take action, and new international accounting standards (IAS) defined rules on boards¡¦ responsibilities and imposed penalties (the Sarbanes-Oxley Act) have come into effect. IAS rules will cause a greater need for comparability across various accounting and reporting principles. The European Union has decided that listed companies, a company which has any of its shares listed on a recognized stock market, should use international accounting standards (IAS) for accounting periods beginning since January 2005.... [tags: Account Standards Accuracy Reports Financial State]
2094 words (6 pages)
- Sarbanes-Oxley: Effective Governance. Introduction On December 2, 2001, less than a month after it admitted accounting errors that inflated earnings by almost $600 million since 1994, the Houston-based energy trading company, Enron Corporation, filed for bankruptcy protection. With $62.8 billion in assets, it became the largest bankruptcy case in U.S. history, dwarfing Texaco's filing in 1987 when it had $35.9 billion in assets. The day Enron filed for bankruptcy its stock closed at 72 cents, down from more than $75 less than a year earlier.... [tags: Accounting Regulation]
1889 words (5.4 pages)
- Analysis of Sarbanes-Oxley – Section 404 And Affect on Small Companies Content I. Executive Summary 1 II. Background Facts 2 III. Issue Stated 3 IV. Analysis 4-5 V. Conclusion 6 VI. References 7 Executive Summary 404 of Sarbanes Oxley: It’s affect on small business.... [tags: Accounting Regulation]
1998 words (5.7 pages)