Sarbanes Oxley

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In the early 2000s the Sarbanes-Oxley act became established Due to some fraud scandals in companies such as Enron, WorldCom, Tyco International, ImClone, etc. Some people also know this law as the Public Company Accounting Reform and Investor Protection Act. Within the companies there were frauds made by CEOs and CFOs due to the lack of internal controls. Not only that but also the financial statements were manipulated to inform investors the wrong information. So this law was established to remove excuses from CEOs and CFOs like “I wasn’t aware of financial issues” (SOX-online). In 2000 to 2002 many investors lost billions of dollars because there was no legal act that protected their investments in companies. This act specifically became enacted on July 30th 2002 “to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes” (SOX-Online) like recovering the nations trust.
On the Sarbanes- Oxley Act 2002 website it explains when the Act was enacted, specific sections of the law, the rules of compliance and the sponsors of the law. This website had brief details but it had the necessary key aspects. The Sarbanes- Oxley Act was named after its sponsors “Senator Paul Sarbanes and Representative Michael Oxley” who also “set a number of deadlines for compliance” (Sarbanes-Oxley Act 2002). The law was approved by the House of Representatives and signed by George W. Bush, winning “97 to 0 in the Senate” (SOX-online). This act gave many people the confidence to invest in companies again and trust the companies but there were problems as well. Many people had to become private in order to somewhat comply with this new law. Many of those people wante...

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...s of public companies in relation to financial and accounting behavior (Sarbanes-Oxley). Under this tittle “if financial statements must be revised because of misconduct, the CEO and CFO” get “bonuses or incentives from securities sales” (Sarbanes-Oxley). This tittle is effective and is helpful in trying to avoid frauds done on financial statements, by giving its management incentives in trying to commit any fraud themselves.

Works Cited

"Sarbanes-Oxley Essential Information." Sarbanes-Oxley Basics. N.p., n.d. Web. 26 Feb. 2014.
"The Sarbanes-Oxley Act." The Sarbanes-Oxley Act 2002. N.p., n.d. Web. 26 Feb. 2014.
"Sarbanes-Oxley." Inc.com. N.p., n.d. Web. 01 Mar. 2014
K, Donald, Junior Mcconell, and George Y. Banks. "How SOX Will Change the Audit Process." How Sarbanes-Oxley Will Change the Audit Process. Journal of Accountancy, 4 Sept. 2003. Web. 01 Mar. 2014.

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