Effects Of Sarbanes-Oxley Act SOX

1866 Words8 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. 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.
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