The Sarbanes-Oxley Act of 2002 (SOX) was created in response to the series of misleading and fraudulent activities of publicly traded big business’s in the 1990s. During this time, multiple large publicly-traded businesses increased their stock prices by “publishing false or deceptive financial statements” (Lasher, 2008, p. 187). The most publicly charged company was Enron, which was then followed by Xerox, WorldCom and Global Crossing. This resulted in millions of dollars of stock market value disappearing in what seemed to be overnight. It is in response to these events that Congress drafted and passed the Sarbanes-Oxley Act of 2002.…
Financial reporting has been dissected over and over again by legislation. The U.S. Securities and Exchange Commission (SEC) hold the key to providing protection and integrity when companies are submitting their financial statements. Although their mission is to provide order and efficiency for financial markets, insidious plans are still developed by companies which ultimately result in turmoil to the economy. To provide a safeguard to investors, the Sarbanes-Oxley Act (SOX) was passed by congress in 2002, which was constructed because of fraudulent acts of well-known companies such as Enron. Before the SOX was inaugurated, two sets of accounting rules were used as guides for CPA firms.…
Senator Paul Sarbanes and Representative Michael Oxley drafted the Sarbanes-Oxley Act or "SOX" in 2002 in order to curb the incidence of corporate fraud. The “Act” was signed into law on July 30th 2002 by President George W. Bush with the express purpose of restoring public confidence in the financial markets; and after enacting “the Act”, neither Sarbanes or Oxley would run for re-election in the 2006 elections (Jahmani & Dowling, 2008). The intent of the SOX Act was to protect investors, and any other stakeholders in a company, by improving the validity and reliability of corporate disclosures, such as financial statements and earnings reports, pursuant to existing securities laws and regulations governing publically traded companies (Kessel, 2011). The SOX Act holds corporate Chief…
Policy Paper on the Sarbanes-Oxley Act of 2002 Randy Ibrahim [SID: 860866350] Business 102 December 09, 2010 Dr. Sean D. Jasso…
Descriptions of the main aspects of the regulatory environment which will protect the public from fraud within corporations are going to be provided in this paper. A special attention to the Sarbanes – Oxley Act of 2002 (SOX) requirement; along with an evaluation of whether Sarbanes-Oxley Act will be effective in avoiding future frauds based on their implemented rules and regulations.…
I have written this report in order to fulfill my graduation requirements at Southwestern College. Also to become more knowledgeable on the Sarbanes-Oxley Act of 2002 (SOX) and the impact it has had on the business world.…
The government is charged with the responsibility of protecting its citizens. This responsibility is extended not only to administering punishment through enforcement of legislation but also to preventing occurrences through the enactment of laws to protect their citizens. The government had to act.…
In the beginning years of the new century a series of huge corporate frauds predominated the business sections and front pages of dominant newspapers, shaking public confidence in the integrity of corporate America. Those scandals also raise serious questions about the integrity, acuity and prudence of business leaders and accountants who structure and document business transactions, approve required financial disclosures, and, in the case of accountants, certify the accuracy of required reports (Enrione, Mazza, & Zerboni, 2006).…
The Sarbanes-Oxley Act of 2002 (often shortened to SOX) is legislation enacted in response to the highprofile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. The act is administered by the Securities and Exchange Commission (SEC), which sets deadlines for compliance and publishes rules on requirements. Sarbanes-Oxley is not a set of business practices and does not specify how a business should store records; rather, it defines which records are to be stored and for how long. The legislation not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation's electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for "not less than five years." The consequences for non-compliance are fines, imprisonment, or both. IT departments are increasingly faced with the challenge of creating and maintaining a corporate records archive in a cost-effective fashion that satisfies the requirements put forth by the legislation. FAQ: What is the impact of Sarbanes-Oxley on IT operations? The following sections of Sarbanes-Oxley contain the three rules that affect the management of electronic records. The first rule deals with destruction, alteration, or falsification of records.…
The Sarbanes-Oxley Act of 2002 is mandatory. All large and small organizations must comply with this act. The legislation came into existence in 2002 as a result of a number of corporate and accounting scandals and introduced major changes to the regulation of financial practice and corporate governance. The main architects of the acts were Senator Paul Sarbanes and Representative Michael Oxley. The SOX act protects the shareholders from forged representations in corporate financial statements. The financial information on which the investors rely should be truthful and its accuracy must be verified by an independent third party.…
The Sarbanes-Oxley Act was established in 2002 and has initiated extensive transformation to the parameter of economic practice and shared bureaucracy. Nevertheless, it was named after Legislator Paul Sarbanes and Representative Michael Oxley, who were the founders, given it the title Sarbanes-Oxley Act of 2002. On July 30, 2002, President George Bush signed off on SOX, revising the security laws that, moderately, reevaluate the responsibility of accountants. Although the focal point of this statute is on shared organizations, it is projected that banks and investors, who necessitate reviewed reports of the…
The Sarbanes-Oxley Act of 2002 is an act passed by U.S. Congress in 2002 to protect investors and the general public from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act authorized strict modifications to improve financial disclosures from corporations and to prevent accounting fraud. This law was passed after a couple of big the accounting scandals like Enron, Tyco, and WorldCom shook investor assurance in financial statements and required an overhaul of regulatory standards. The act is administered by the Securities and Exchange Commission, which sets deadlines for compliance and publishes rules on requirements. It is not a set of business practices and does not specify how a business should store records; rather it tells more which records are to be stored and for how long in case of hearings.…
The Sarbanes-Oxley Act of 2002 was created by sponsors U.S. Senator Paul Sarbanes(D-MD) and U.S. Representative Michael G. Oxley (R-OH) in response to very public corporate fraud and accounting scandals. In a seemingly short period of time, Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom all collapsed. The majority of these scandals resulted from the inaccurate reporting of financial transactions. The financial statements of these organizations were so gravely misrepresented and misstated that once the organizations' records were presented fairly, it caused the total collapse of the company. As a result of these scandals, investors lost billions of dollars when the share prices collapsed, and the public lost confidence in the nation's securities markets and the auditor who were supposed to protect the public's interest.…
Hunter’s article examines how the Sarbanes-Oxley Act (SOX Act) is too stringent and gives too much power over companies to governing bodies, i.e. the Public Company Accounting Oversight Board (PCAOB) (Hunter, 2007). It discusses how the SOX Act is unfair to domestic and foreign and small and large companies, their shareholders, and the public. The piece explains how the Act may compel some companies to use unethical actions to conduct business and prevent accruing penalties (Hunter, 2007).…
Chapter 5: the Sarbanes- Oxley act of 2002 involved the public anger that started when Enron, WorldCom, and other big companies scandals. This is when there was support for white collar crime when it came to accounting standards. Under the law of federal sentencing rules to make sure that white collar criminals are being punished. (Barnes, 2012). 1. For someone to alter or get rid of documents and there intensions to obstruct or effect the crime/case. 2. The CEO (chief executive officer) and the CFO (chief financial officer) must clarify that repots have been submitted to the SEC (securities and exchange commission.) it is a crime if the CEO and CFO make a report that is false. 3 CEO and CFO must reimburse the company for any raises and if…