This act was created as a reaction to a plethora of corporate and accounting controversies, such as that associated with Enron, Tyco International and WorldCom. These controversies involved corporate frauds during the years to and these were related to the conflict between the interest rates and compensation measures used by these companies. The Sarbox Act, identified as Pub. The Sarbanes-Oxley Act has been described as the most comprehensive reform in American business procedures since the administration of Franklin D.
Moreover, Sar-box is an important legal act which involves accounting professional regulation, corporate governance and securities market supervision. It mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud.
The scandals of big business companies such as Enron, Tyco, WorldCom extremely affected the investors confidence in the financial statements and the required an overhaul of managerial standards.
In other words, these financial scandal also revealed a lot of disadvantages in terms of regulation of professional accountants as well as corporate governance. With the implementation of Sar-box, it effectively prevent these kinds of situation from happening because one of key points of the bill is to strengthen the financial systems and internal controls through legislation.
And the Sar-box act also required companies to increase corporate financial transparency and timely repair a various of operating defects.
If the companies were failed to reach the requirements of the Sarbanes-Oxley Act, this company would likely face a range of punishments including heavy fines and penalties for corporate management level.Oxley was the House of Representatives sponsor of the Sarbanes-Oxley Act which passed overwhelmingly with a vote in After the Act was put into law both retired from their positions.
(Institute, ) The Sarbanes- Oxley Act was established to revitalize investor’s belief that the financial market is a sound body and uncorrupt. The Sarbanes-Oxley Act of , also known as SOX or Sarbox, was put into law by the United States federal government on July 30, This act was created as a reaction to a plethora of corporate and accounting controversies, such as that associated with Enron, Tyco International and WorldCom.
Sarbanes-Oxley Act This Research Paper Sarbanes-Oxley Act and other 64,+ term papers, college essay examples and free essays are available now on nationwidesecretarial.com Autor: review • February 15, • Research Paper • 2, Words (9 Pages) • 1, Views4/4(1).
- 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, ).
Managerial Accounting Sarbanes-Oxley Act The Sarbanes-Oxley Act of is an act passed by U.S.
Congress in to protect investors and the general public from the possibility of fraudulent accounting activities by corporations. The Sarbanes–Oxley Act of Iliev (): This research paper indicated that SOX indeed led to conservative reported earnings but also reduced — rightly or wrongly — stock valuations of small firms.
Lower earnings often cause the share price to decrease.