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The Impact of Sarbanes-Oxley Act of 2002 on Accounting and Finance Departments

Danika Grace Brown

Lakeland College Kellett School of Business – BlendEd
BA 772 Advanced Industrial Accounting II

Instructor Mary Diederich
March 10, 2015

Table of Contents Abstract 2 Overview of the Sarbanes-Oxley Act of 2002 3 About SOX 4 Reporting and Compliance 5 Risk Assessment and Control 6 Interview at Company X 7 Standards for Corporations and Officers 8 Auditing and Financial Reporting 9 Future Impact of SOX 10 Conclusion 11 References 13

Abstract

Sarbanes-Oxley is the response from Congress in regards to the financial industry collapse that happened over a decade ago. Due to unethical reporting from corporations, Sarbanes-Oxley (SOX) is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. As a result of SOX, top management must individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Furthermore, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements. This paper will look to provide an oversight of the law and how it pertains to the standards in Accounting and Finance departments nowadays. In addition, this paper will also touch on the ongoing costs and benefits of the now standard regulations. An interview with the Accounting and Finance managers will cover the provisions that employers have had to put into place to comply with those regulations.

Overview of the Sarbanes-Oxley Act of 2002

The devastating collapse of prestigious United States’ financial institutions in 2001 has ushered in a paradigm shift in financial accountability; and highlighted the overall…...

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