StudentShare solutions
Triangle menu

Sarbanes Oxley Act - Essay Example

Not dowloaded yet

Extract of sample
Sarbanes Oxley Act

The degree of disclosure of financial information is also a main reason. Mostly the corporate running bodies do not find them answerable in front of any regulatory body; therefore they keep on trying 'innovative' ideas for which others have to pay. (Maclean, 2005)
Financial information in the form of audited accounts can prevent the system slipping into corruption (Sunlight is the best detergent), but it is not clear why, for example, a superior US financial reporting infrastructure did not help us detect Enron.
The Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (July 30, 2002), is a United States federal law also known as the Public Company Accounting Reform and Investor Protection Act of 2002 (and commonly called SOX or SarbOx). With the major financial reforms in most of the countries of the world the Sarbanes-Oxley Act was passed in the United states in order to deal with the issues such as establishment of the public company, the level of auditor's independence, proper monitoring of the accounting practices of the company under a board, corporate social responsibility and enhancement in the financial disclosure to the prescribed level by the act. The law is seen as the major reform in the after the New Deal passed in 1930. The act revolutionized United States securities laws. The House approved act with the majority of 423-3 and Senate by 97-0. The act increased the U.S. Securities and Exchange Commission powers.
The Sarbanes-Oxley Act's requires the companies to make their financial reports certify by the chief executive officers and chief financial officers. According to the act the Executive officers and directors are not allowed to take personal loans. The act prescribed the companies for the extended disclosure of the financial information in order to improve the shareholders and stakeholders accountability. The act also increased the jail sentence duration and increased the fine amount in case of violence of the securities law or misuse. The corporate executives misstating the financial information will also have to face increased sentence time duration and higher amount of penalties. The act also prohibited the audit firms to provide any services additional to that of the auditing to the companies they are working for. The compensation of the Chief executives and other higher executives are also required to be reported. The act also accelerated reporting of trades by insiders and prohibition on insider trades during pension fund blackout periods. (Wikipedia, 2006)























Reference

Maclean, P., (2005). Power Play - Robert McCullough was interviewed for an article covering Enron's role in the California power crisis and its aftermath, Portland Monthly, May 2005, Retrieved 05/005/06 from

Wikipedia, (2006). Sarbanes-Oxley Act, Retrieved 05/005 ...Show more

Summary

The scandals such as Enron and world.com have given a new dimension to the corporate scandals in the history of United States. Due to the collapse of the Enron Corporation the notion of the off-balance financing or non-recognition of external funding on the financial statements of issuing company has gained much importance…
Author : parkercamille
Sarbanes Oxley Act essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Sarbanes Oxley Act"
with a personal 20% discount.
Grab the best paper

Related Essays

Sarbanes-oxley act 2002
It is the system by which companies are directed and controlled in the interests of shareholders and other stakeholders. These major collapses caused a great concern for shareholders and investors around the globe resulting in a huge decrease in the confidence of both the shareholders as well as the investors.
2 pages (500 words) Essay
Sarbanes-Oxley Act
Additionally, this study revealed that the formation of Public Company Accounting Oversight Board (PCAOB) under the Sarbanes-Oxley Act also resulted in strengthening the regulations to a next higher level and ensuring better professional credibility thereafter.
4 pages (1000 words) Essay
Sarbanes Oxley Act
Scenario 2 wished to establish whether or not a CFO or CEO is liable for using their respective position to influence an "audit report" of a public corporation. This can be explained by title XI on fraud accountability. It specifies that tampering and fraud of financial records either by overstatement or understatement attracted a penalty. This may lead to an extent of freezing payment which seems either overstated or understated.
4 pages (1000 words) Essay
Sarbanes Oxley Act Master Essay
The Act recognizes that companies need strong internal financial controls and knowledgeable and independent directors and audit committees to oversee their management and auditors. It seeks to avoid actual or perceived conflicts of interest of outside auditors and encourages companies to adopt formal codes of ethics promoting honest and ethical conduct, appropriate handling of conflicts of interest, accurate financial reporting and compliance with governmental rules and regulations.
25 pages (6250 words) Essay
Sarbanes Oxley Act Essay
Practical limitations of the act have been presented, which are then concluded by a brief discussion about the standards and guidelines that are being used by companies to comply with the requirements of the Act. Accounting is a key area in every organization's business.
7 pages (1750 words) Essay
Sarbanes-Oxley Act
What has caused this downhill slip aside from the terrorist’s deliberate attack weaken the economy? Enron Corporation is in Energy commerce, involved in electric utilities and power gas
8 pages (2000 words) Essay
Sarbanes Oxley Act
In fact, especially for nonprofit entities, the provisions of the SOX may very well directly apply to them. SOX requirements such as the establishment of an audit committee, good governance, adequate financial
4 pages (1000 words) Essay
Sarbanes-Oxley Act
The Sarbanes- Oxley Act or the Sarbox Act is an Act of Investor Protection as well as Reform of Public Company Accounting. It was enacted in mid-year 2002. This was subsequent to
2 pages (500 words) Essay
Sarbanes-Oxley Act
ccounting professions through its regulations from adopting any unethical approach in developing financial statements that are illegal as well as unethical. Additionally, this study revealed that the formation of Public Company Accounting Oversight Board (PCAOB) under the
4 pages (1000 words) Essay
Sarbanes-Oxley Act of 2002
ch as Enron, Tyco and WorldCom committed frauds duping public and investors, the SEC was given more powers under a new Act called the Sarbanes-Oxley Act (SOX) of 2002. The Sarbanes-Oxley Act of 2002 was drafted by Senator Paul Sarbanes and Michael Oxley. The US Congress enacted
2 pages (500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation