Sarbanes- Oxley Essay

Submitted By kegee357

Words: 417

Pages: 2

Open Document

DeAndre Adams
Dr. Gandy
Business Law 1-2
12-03-12
Sarbanes- Oxley Sarbanes-Oxley was enacted and became a law on July 30 , 2002 as a result of accounting and corporate scandals which affected millions. This Act was implicated to provide security from present and future scandals by strengthening the requirements of audit checks. This law has 11 major provisions such as PCAOB, Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns, and Corporate Fraud Accountability. A public accounting board also known as PCAOB was created to involve the Securities Exchange Commission in auditing. No longer are fraudulent auditing services able to be hired to perform company audits. This is to ensure that the responsibility of the audit remain within these companies. The lead auditor may not serve a term longer than five years anymore. Management may not monitor the auditing committee. These individuals are required to report to the auditing board. Members of the auditing board must not be involved with or receive any other funds from the company for any other service in which they are auditing. The auditing committee monitors the auditors instead of management. Most importantly, company CEO’s and CFO’s are being held responsible for their company’s financial statements. They are required to state these financial records and explain them. Any lack of compliance in reporting will cost these companies to pay back any money that they received from the statements that were falsely reported. This leaves

The Sarbanes-Oxley Act

The Sarbanes-Oxley act is a result of the series of companies manipulating their financial statements in order to provide misleading impressions of their financial status within the marketing economy (site source). This fraudulent activity hashad a negative effect on pension and trust funds within the capital marketing system. Companies such as Enron and WorldCom caused devastating effect on the economy. They are responsible for contributing to approximately $6 trillion worth of stock to disappear…

Words 499 - Pages 2

The Sarbanes-Oxley Act

Based on the 6 importance of Sarbanes-Oxley Act, he violated the first important thing is the CFO must ensure the integrity of financial reports. While, he perjury financial statements of the company. Secondly, he performed all of the auditing profession by himself, leading to fraud. Third, he has self-determination that sold 1.7 million shares of stock in another company. Therefore, He had has faced charges of making false statements and wire fraud lead to HealthSouth’s profit's inflation up to…

Words 162 - Pages 1

The Sarbanes-Oxley Act

Sarbanes-Oxley Act (SOX Act) of 2002 Article Need for Establishment The Sarbanes-Oxley Act was passed as an answer to and in response to a large-scale occurrence of corporate scandals. Most notably were the doctored financial reports of large companies like Enron, Tyco, and WorldCom in which many questionable business transactions that resulted in massive stakeholder losses and shattered investor confidence ensued. The Sarbanes-Oxley Act Intent The acts primary intent is to protect businesses and…

Words 821 - Pages 4

The Sarbanes-Oxley Act

Yes, I think the Sarbanes-Oxley Act was the appropriate action to take to deal with the financial corruption in companies such as Enron and Worldcom. Before the Sarbanes-Oxley Act was developed these large firms could alter their financial statements frequently, since there was little or no oversight at all. The Sarbanes-Oxley Act requires accountants to perform stricter and even more thorough inspections when conducting a business audit for the different organizations (Ferrell, Ferrell, & Hirt,…

Words 296 - Pages 2

Sarbanes-Oxley Act Essay

Sarbanes-Oxley Act of 2002 James Gauck ACC/290 December 17, 2012 Susan Laymon Sarbanes-Oxley Act of 2002 On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002. The Act-which applies in general to publicly held companies and their audit firms-dramatically affects the accounting profession and impacts not just the largest accounting firms, but any CPA actively working as an auditor of, or for, a publicly traded company. The basic implications of the Act for accountants…

Words 482 - Pages 2

The Sarbanes-Oxley Act

Sarbanes-Oxley Act Occurring in the early 2000’s high profile companies such as Tyco, Enron, and WorldCom were part of high-profile financial scandals which worried investors. The Act was brought to Congress by U.S Congressmen Paul Sarbanes and Michael Oxley, and the purpose of the Act was to improve corporate governance and accountability. Also, the act not only targets the financial aspect of corporations, but the IT departments as well, which are responsible of storing a company’s electronic…

Words 404 - Pages 2

The Sarbanes-Oxley Act Of 2002

The Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 On July 30, 2002, President Bush signed the Sarbanes-Oxley Act of 2002 (SOX) into law, stating the legislation would be “The most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt,” (Process, 2012). The Act was designed to mandate many reforms in order to require greater corporate responsibility, disclosure, transparency, and to combat against accounting fraud. In response to several…

Words 2815 - Pages 12

The Sarbanes-Oxley Act Of 2002

Introduction: The Sarbanes-Oxley Act of 2002 (SOX) is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. Sarbanes-Oxley introduced major changes to policies that govern publicly traded companies. The significance of SOX was to regain the communities support and trust, after several financial scandals among large corporations. In this report, we will also consider your internal controls and highlight the goods…

Words 1115 - Pages 5

Sarbanes-Oxley Act Essay

The Sarbanes-Oxley Act created new standards for corporate accountability as well as new penalties for acts of wrongdoing. It changes how corporate boards and executives must interact with each other and with corporate auditors. The Act specifies new financial reporting responsibilities, including adherence to new internal controls and procedures designed to ensure the validity of their financial records. The Sarbanes-Oxley Act, officially named the Public Company Accounting Reform and Investor Protection…

Words 641 - Pages 3

What Is The Sarbanes-Oxley Act Of 2002

Sarbanes-Oxley Act of 2002 was designed to reform the report, the administration and public financial reports of the company shares. Sarbanes-Oxley Act (SOX) requires joint stock companies to pay attention to the public relevance of financial information, maintaining the process management of internal information exchange, backup and data protection this information. In order to protect the interests of customers and investors, avoid the losses on the assets of the enterprise. Accordingly, punished…

Words 121 - Pages 1