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Sarbanes Oxley Act of 2002

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Sarbanes-Oxley Act of 2002
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Sarbanes-Oxley Act of 2002
Following a number of discovered fraud scandals committed by well-known corporations and in order to restore public confidence in the stock market and trading of securities, the United States congress passed the Sarbanes-Oxley Act in the year 2002. As a result of the act endorsement by the New York Stock Exchange and the Securities and Exchange Commission, among many other national overseeing committees, a number of rules and regulations were proposed and adopted and that demanded new processes and programs be instilled for ensuring compliance with the requirements of the new law. The new rules and regulations pertaining to the enacted law have a common goal: 1. Pass accountability and responsibility of the accuracy and truthfulness of financial statements directly to the executives and board members of a company or corporation 2. Increase transparency of corporate accounting and performance record reporting 3. Business reporting ethics to be emphasized with in-place steps and procedures adopted to detect and prevent any type of fraud or manipulation of stakeholders for private benefit.
Traditionally, preparation of a company’s financial statements including day-to-day management of the company has been the responsibility of the board of directors and upper management team of the company. The new law clearly rests the responsibility for accuracy and truthfulness of the published financial records on the shoulders of the responsible directors who in turn are commissioned with the responsibility of making sure the law is applied such that all elements of the regulations, including accurate validation of the company financial performance and enforcing internal controls to prevent fraudulent reporting of financial records. Company directors are also made responsible for instituting check

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