The Costs, Benefits and Unintended Consequences of the Sarbanes-Oxley Act 2002

The Costs, Benefits and Unintended Consequences of the Sarbanes-Oxley Act 2002 Essay example
Masters
Essay
Finance & Accounting
Pages 6 (1506 words)
Download 0
The Costs, Benefits, and Unintended Consequences of the Sarbanes-Oxley Act 2002 Introduction Hellen Gebremichael’s article “The Costs, Benefits, and Unintended Consequences of the Sarbanes-Oxley Act 2002” which was published in August 2012 expounds on the positive and negative effects of the Sarbanes-Oxley Act…

Introduction

The Sarbanes-Oxley Act, which was enacted by the congress on 30th July 2002, benefited the corporate sector but not without posing certain challenges to public companies that was required to implement it. The Sarbanes-Oxley Act aimed at restoring the investors’ confidence, which had been extinguished by the numerous frauds that had affected or even led to collapse of different companies. This paper is a critical review of Gebremichaels’s article and will give a summary of the article, critically evaluate the arguments in the article by analyzing the weaknesses, limitations, and problems of the article. Additionally, the paper will focus on the strengths and usefulness of the article particularly for study purposes. Summary Gebremichael’s (2012) article “The Costs, Benefits, and Unintended Consequences of the Sarbanes-Oxley Act 2002” claims that Sarbanes-Oxley (Sox) Act of 2002 is the most discussed legislation in the capital market. The research was carried out with the aim of evaluating how implementation of the SOX Act had affected the capital markets, economy, and entire corporate sector in the United States. The study focused on aspects of the SOX Act such as the benefits, consequences, and cost of its implementation. ...
Download paper
Not exactly what you need?

Related papers

Making Sure Enron Does Not Happen Again: The Sarbanes-Oxley Act of 2002
The collapse of the corporate giant brought about a startling reality to the world of business: the corporate giant (and their auditors) had lied. As a direct result of the collapse of Enron and the subsequent meltdown of its auditing firm Arthur Andersen, the Sarbanes-Oxley Act was proposed. It quickly became apparent to all as soon as the scandal became public that both it and the cause behind…
Adoption of the Sarbanes-Oxley Act of 2002 as an Important Piece of Legistion
The SOX was the state’s response to the corporate scandals of the early 2000s, namely Enron and WorldCom. Congress sought to restore public confidence in the financial reporting system through the enactment of SOX. Section 404, in particular, treats on the requisites of the internal control system that companies must abide by. This section requires the filing of an internal control report where…
Adoption of Sarbanes-Oxley Act of 2002 as an Important Piece of Legislation
In the last section the report evaluates the costs and benefits of the changes ushered in by the Sarbanes-Oxley act of 2002. The Sarbanes-Oxley Act of 2002 was drafted by the senator Paul Sarbanes and representative Michael Oxley (SOX-online.com, 2006: Online). The primary objective of the Sarbanes-Oxley Act was to protect and safeguard the interests of the investors by assuring transparency,…
Research and Discuss the Sarbanes-Oxley Act of 2002
Key Components and Primary Objectives of the Act: The basic matters identified and revised in the act included the creation of regulatory board to oversee the activities of the public accounting audit firms, revised standards for auditor’s independence and audit committee, requirement of certification of the SEC’s reports by the executives of the public companies, restricts the rules to…
Sarbanes Oxley Act.
In the US, the Sarbanes Oxley Act is a federal law that was established to enhance standards for all public accounting firms, management firms and public company boards. The Sarbanes Oxley Act got its name from its two main sponsors and architects, namely, Michael Oxley who was a US Representative and Paul Sarbanes who was a US Senator (Kohn, Kohn & Colapinto 12). The Sarbanes Oxley Act requires…
Sarbanes-Oxley Act Article Analysis
Section 404 demands that a corporation assess and report to the SEC its internal control’s effectiveness with the review and judgment by an external auditing firm. In assisting in implementation of SOX, the Act creates the Public Company Accounting Oversight Board (PCAOB) that supervises the assessment of corporate audits with compliance to SOX. The PCAOB knows the risks of having poor security…
Sarbanes-Oxley Act
Sarbanes-Oxley Act The Sarbanes-Oxley Act is deemed to be quite effective in protecting the investors and enhancing the factor of accurateness and reliability in various corporate financial activities. It has further been noted that the act mainly aims at enhancing the above mentioned aspects in a constant basis with the implementation of strict laws and rules for audit committees of public…