Please boost your Plan to download papers
Theories Market Efficiency Versus Investor Prospects
Finance & Accounting
Pages 9 (2259 words)
The Sarbanes-Oxley act (SOX) outlines new reforms made in the financial industry that stresses the importance of setting up corporate board of directors that will comprise of majority of independent directors whose primary responsibility will be to oversee audits, executive compensation and nomination of new independent directors. …
The reforms specified under the Sarbanes-Oxley act mandates the practices specified above. These practices have for long been considered to be crucial factors of a robust corporate governance framework. The act stressed the importance of not allowing external auditors to perform lucrative non-audit services. One example of such services is information technology consultancy provided by the external auditors to their audit clients. This approach was an already existing policy of many good governance advocates. The huge scandals that involved companies like, Enron and WorldCom, who were associated with accounting frauds characterized by presentation of obscure, incomplete and confusing financial data and business relationships that had misled external investors, had suggested the necessity to introduce an act that will impose strict regulations on the accounting system all over the world, thereby giving rise to a robust governance framework. That being said, it is not surprising that following the scandals, the reforms that were brought in the post-SOX governance framework were mostly related to the process of auditing and presenting financial data. The largest dollar impact on the US economy was stimulated by the post-SOX changes made in the auditing regulations. ...
Not exactly what you need?