The Sarbanes-Oxley Act of 2002

1670 words 7 pages
The Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002
The Act & Impact
ACC 410, Jackie Lewis, Ph.D.

The Sarbanes-Oxley Act, officially named the “Public Company Accounting Reform and Investor Protection Act of 2002”, is recognized to be the most noteworthy U.S. federal disclosure and corporate governance legislation since the Securities Act of1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act). Furthermore, the provisions of the Act are momentous enough that it is considered by many to be the most significant change to the federal securities laws in the U.S. since the New Deal.

The Sarbanes-Oxley Act of 2002
The Act & Impact
The Sarbanes-Oxley Act of 2002 was signed
…show more content…

The PCAOB is funded by fees paid by all publicly-traded companies based on their market capitalization. (The Institute of Internal Auditors. “The Sarbanes-Oxley Act of 2002: Effect on Audit Committees at Organizations Not Publically Traded.” January 2004. Accessed May 31, 2012 from:

Why was the Sarbanes-Oxley Act established?
SOX was enacted during a time of remarkable turmoil amongst corporate America. Following the collapse of Enron Corporation in 2001, the George W. Bush administration, members of the U.S. Congress, the SEC, and the stock exchanges proposed expansive regulation. This was to address the seemingly systematic failures in governance, internal controls, and disclosure practices of public companies. Seeking to determine if fraud was or was not widespread in all major public companies, the SEC ordered the CEOs and CFOs of the 945 largest publically-traded companies to file sworn statements attesting to the integrity of the financial and other information contained in their SEC filings for the year of 2002. Meanwhile, numerous pieces of reform legislation were being bounced around Congress, unnoticed until the landmark disclosure of WorldCom, Inc., multi-billion dollar accounting scandal made headlines. WorldCom’s debacle has been noted as one of history’s largest frauds.
The wave of corporate scandals propelled Congress and the White House to


  • Enron Research Paper
    3108 words | 13 pages
  • Worldcom: the Story of a Whistle-Blower
    1948 words | 8 pages
  • Acc 564 Assignment 1
    1071 words | 5 pages
  • Chapter 1--Introduction to Accounting Information Systems
    7316 words | 30 pages
  • Ethics and Financial Reporting
    2991 words | 12 pages
  • Ljb Company
    932 words | 4 pages
  • Ethics Article Review
    870 words | 4 pages
  • Trueblood Case Analysis 08-9: Fraud and Illegal Acts
    3247 words | 13 pages
  • Fall of Enron
    1137 words | 5 pages
  • Mgt7019-1 Different Perspectives of Drucker, Friedman and Murphyy
    2370 words | 10 pages