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Sarbanes Oxley

In: Business and Management

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The Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204, 116 Stat. 745, also known as the

Public Company Accounting Reform and Investor Protection Act of 2002 and commonly

called SOX or Sarbox; July 30, 2002) is a United States federal law passed in response to

a number of major corporate and accounting scandals involving prominent companies in

the United States. This examination of the Sarbanes- Oxley Act of 2002, will address the following:

1.Analyze the new or enhanced standards for all U.S. public company boards, management, and public accounting firms that the SOX required.

2.Examine why the new enhanced standards are necessary

3. Evaluate the benefits and cost of the SOX

Through research of the Sarbanes-Oxley Act of 2002, the above questions will be addressed.

Analyze the new or enhanced standards for all U.S. public company boards, management, and public accounting firms that the SOX required.

Sarbanes-Oxley Act was enacted following a number of major corporate and accounting

scandals involving prominent U.S. companies. Public trust in accounting and reporting

practices was in a spiraling decline, SOX was designed to protect investors by improving

the accuracy and reliability of corporate disclosures made in accordance with the

securities laws. SOX standards must be followed or strict penalties for noncompliance

can result. According to the U.S. Attorney General in August 2002 “ the Act provides

tough new tools to expose and punish acts of corporate corruption, promote greater

accountability by financial auditors , and protect small investors and pension holders.

The Department of Justice will play a critical role in implementing the act and in helping to restore confidence in America’s corporations and...

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