StudentShare solutions
Triangle menu

The Sarbanes Oxley - Essay Example

Nobody downloaded yet

Extract of sample
The Sarbanes Oxley

Correct recording and representation of material financial and operational facts about a company is critical for stakeholders to measure their interests into the company. Several industry standards are available for correct recording, calculation, and representation of this information. In addition, almost every country makes or adopts an accounting and internal control system which is mandatory for all the companies to follow. As time passes by, needs and requirements of new and comprehensive systems emerge that necessitates changes in the way traditional accounting and control systems operate.
The corporate world in United States took severe setbacks when scandals were surfaced about many large and multinational organizations in late 20th century. The companies like Enron, Tyco, and WorldCom were all victims of incorrect, ambiguous, unethical and inappropriate practices which remained hidden for a long period before they were finally identified and brought to the attention of the world. This sequence of events negatively affected shareholders' and general public's trust over the reliability and accuracy of financial information as published by companies. A general feeling was that of distrust, disbelieve, doubt and annoyance with the audit and internal controls systems of organizations. ...
The Sarbanes Oxley Act
The Sarbanes Oxley Act (also known as known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or Sarbox ( 2007), was implemented in 2002 to regain public's trust in the accounting and reporting practices of companies in US, to reinforce investment confidence and protect investors by improving the accuracy and reliability of corporate information with regard to finance, operations and information systems. All public U.S. and international companies that have registered equity or debt securities with the Securities and Exchange Commission need to comply with Sarbanes Oxley act.
The section 302 of the act requires CEOs and CFOs to personally certify quarterly and annual financial statements. The first instance of sentencing a CEO for failure to comply with the act occurred in 2003. SOX violations can bring fines up to $5 million or 20 years in prison (IBM 2004).

5. Key Sections of the Act
The act is divided into multiple sections; eleven in all. A brief description of the sub-sections of the act is provided below:
5.1. Establishment of Public Company Accounting Oversight Board (PCAOB)
A Public Company Accounting Oversight Board (PCAOB) was established as a result of the passage of the act, to ensure that interests of the investors in public companies are secured, and the audit reports are developed and represent true and fair opinion on the affairs of the company ( 2002). The key functions and duties of PCAOB as documented in the law are as follow:
Register public accounting firms
Establish or adopt auditing, quality control, ethics, independence, and other standards
Conduct inspection of public companies
5.2. Auditor Independence
The 'independence' of the auditor is ...Show more


This paper discusses one of the most important contemporary issues in accounting and controls field - the Sarbanes Oxley Act (SOX). The background information identifying needs and requirements for a comprehensive accounting and auditing framework have been discussed; which is then followed by the salient features of the act itself…
Author : caliparker
The Sarbanes Oxley essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The Sarbanes Oxley"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Impact of the Sarbanes-Oxley Act on the Accounting and Auditing Profession
In July 2002, the Sarbanes-Oxley Act (SOX) was enacted by the U.S. legislature. The necessity of creating a law more stringently regulating the actions of audit firms was made apparent by the failures of the Enron in the latter part of 2001 and Arthur Andersen in the early part of 2002 (Ryu, Uliss & Roh, 2009).
3 pages (750 words) Essay
Internal Control System. The Sarbanes Oxley Act (SOX)
The five major components of an internal control system are control, risk assessment, information and communication, control activities, and monitoring. All of the components are necessary for the effective functionality of a control system because they are interrelated.
4 pages (1000 words) Essay
The Costs, Benefits and Unintended Consequences of the Sarbanes-Oxley Act 2002
The study entailed a review of existing literature on Sarbanes-Oxley Act. Gebremichael did the study as part of a degree in Accounting and Finance, which she pursued in Coventry University. The study is important since it deals with an issue that has and continues affecting companies within the United States.
6 pages (1500 words) Essay
The Sarbanes-Oxley Act (SOX) --can a law guarantee the accuracy of public financial statements
The requirements were essential to evade related incidences in the days to come. The previous laws or legislations failed because of insufficient disclosure practices, poor governance, and general lack of satisfactory internal controls (Miller, 2011). The previous legislations did not address majorly the accuracy of financial reports to the extent of meeting investor and public expectations.
3 pages (750 words) Essay
The affect of the Sarbanes-Oxley Act on Housing and Urban Development (HUD) Audits
As a result the Government of US brought the Sarbanes and Oxley act1. The act was framed by Paul Sarbanes and Michael Oxley and hence was named after them. The act called for more transparency in publishing financial documents and asked to avoid engaging in fraudulent activities.
21 pages (5250 words) Essay
The Sarbanes-Oxley Act of 2002
The central thrust of this legislation was a desire to rehabilitate the public's trust in accounting practices and to institute various reporting, inspection, and disciplinary regulations and processes in order to improve transparency. The Act, however, has generated a fair amount of heated debate.
5 pages (1250 words) Essay
The Sarbanes-Oxley Act of 2002
This act is also referred to as the Public Company Accounting Oversight Board. The board will keep track of and inspect all the accounting firms, investigations and disciplinary proceedings, and also
2 pages (500 words) Essay
How the Sarbanes-Oxley Act has made an impact on business
s of unscrupulous editors who used the loopholes in the previous accounting procedures to rob the public and shareholders significant amounts of money. The act presented a considerable shift in auditing and other financial management practices in the public and private firms.
1 pages (250 words) Essay
Compare Rule 101of the Sarbanes-Oxley Act (SOX, 2002) and Standard 1100-Independence and Objectivity
The chief auditor has direct and unrestricted access to the senior management and the board members to gain sufficient data for formulating the internal audit report. It is essential for the audit
10 pages (2500 words) Essay
Assignment 1: Impact of the Sarbanes-Oxley Act (SOX)
Stakeholders expect that financial information should be truthful because most individuals rely on its integrity. The United States Congress passed
4 pages (1000 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us