Sarbanes-Oxley Act Paper
One of the most widespread laws that were passed after the 2001 financial corruption of Enron, along with several other scandals, such as WorldCom and Tyco caused the implementation of the Sarbanes-Oxley Act (SOX) of 2002. These corporations sent a financial shockwave throughout our country crashing the markets. As a result, the people were no longer confident in the financial markets and their work ethics. They wanted to understand how effective it would be upon its implementation. This paper will address how beneficial the SOX Act has become by showing how cost, internal control, and the prevention and detection fraud changed the accounting profession in numerous ways.
Keywords: Sarbanes- Oxley (SOX), cost, internal control, Enron, fraud, …show more content…
After some of the largest and most successful corporations such as Enron, Krispy Kreme, WorldCom, and Tyco was major investigated as commenting corporate and accounting fraud. At this time, Congress knew they had to act, so in 2002 President George W. Bush signed into law the Sarbanes-Oxley (SOX) Act. This Act sparked a major change to the financial practice. The Act also was set in place to depress illegal acts by financial reporters and protect investors by improving the quality of financial reporting companies and reestablish public trust in accounting and reporting practices. The benefits of complying with the SOX include: long term impact of cost, better internal control, and ability to prevent and detect …show more content…
The outcomes of the Act opened the eyes of corporate America and the U.S. government in order to help shape the way companies are ran in today’s corporations. After past upsets with companies such as Enron, Tyco, and WorldCom, investors’ confidence in companies decreased, but once the SOX Section 404 guidelines were set investors saw that it left no room for error for unsuccessful internal controls, mismanagement of funds, and fraudulent activities. However, we all know that fraud and greed will happen and companies have to be mindful of that. Overall, the SOX Act of 2002 has been very beneficial and corporate America is better off by having in place into
Keywords: Sarbanes- Oxley (SOX), cost, internal control, Enron, fraud, …show more content…
After some of the largest and most successful corporations such as Enron, Krispy Kreme, WorldCom, and Tyco was major investigated as commenting corporate and accounting fraud. At this time, Congress knew they had to act, so in 2002 President George W. Bush signed into law the Sarbanes-Oxley (SOX) Act. This Act sparked a major change to the financial practice. The Act also was set in place to depress illegal acts by financial reporters and protect investors by improving the quality of financial reporting companies and reestablish public trust in accounting and reporting practices. The benefits of complying with the SOX include: long term impact of cost, better internal control, and ability to prevent and detect …show more content…
The outcomes of the Act opened the eyes of corporate America and the U.S. government in order to help shape the way companies are ran in today’s corporations. After past upsets with companies such as Enron, Tyco, and WorldCom, investors’ confidence in companies decreased, but once the SOX Section 404 guidelines were set investors saw that it left no room for error for unsuccessful internal controls, mismanagement of funds, and fraudulent activities. However, we all know that fraud and greed will happen and companies have to be mindful of that. Overall, the SOX Act of 2002 has been very beneficial and corporate America is better off by having in place into