Sarbanes Oxley Act 2002

Anna Hendryx family 14, 2010 Acc. 201 Sarbanes-Oxley constitute 2002 Extra Credit Report hot dog Huber Introduction The Sarbanes-Oxley morsel of 2002 was a piece of unalikeiate that came into effect in 2002 which introduced major changes to the regulations of the many fiscal practices as hearty as bodied governance. This circumstance piece of legislation was named after Senator Paul Sarbanes and congresswoman Michael Oxley. In this paper I will be discussing the overview, compute purpose, and whether or not SOA was a achiever or failure. OverviewThe Sarbanes-Oxley doing of 2002 has been deemed as be the close to significant change to securities laws since the 1934 Securities Exchange Act. The Sarbanes-Oxley Act was sign(a) by President George W. Bush in 2002, and became in force(p) on July 30th of that year. The Sarbanes-Oxley Act, which is often times referred to as SOX, was an act that set forth records management as fountainhead as retention policies for all ev eryday companies. This particular act was enacted in response to corporate scandals that involved large corporations, the Enron scandal being unrivalled of the more popular. Anand, 2004) The Sarbanes-Oxley Act requires all financial names to accommodate an internal swear report. What an internal control report is designed to do is to show the companys financial data accurately. Companies have self-confidence in these particular reports because its adequate controls are in gravel at all times in order to safeguard financial data. All year-end financial reports must always contain an assessment of the forte of all internal controls. (Anand, 2004) Intended Purpose The intended purpose of the Sarbanes-Oxley Act was passed in the spot clear up of major corporate scandals.What a lot of these scandals had in common were that they engaged in skewed account of selected transactions. For example companies such as Enron, Tyco, and WorldCom misrepresented a variety of questionable tra nsactions which ultimately resulted in very large losses for the stakeholders, of the companies, as well as a crisis in investor confidence. (Green, 2004) It was thought of by Congress that the Sarbanes-Oxley Act would address the problem by aiming to enhance corporate governance as well as to strengthen corporate accountability.Some of the ways that the Act does this is it formalizes and strengthens internal checks within corporations. It has instituted various new levels of control and sigh-off which is designed to ensure that financial reporting exercises the wax disclosure and that corporate governance is transacted with full transparency. (Green, 2004) Has the Sarbanes-Oxley Act been a success or a failure? This particular question is very debatable among different people. I would like to include both sides those who think that SOA has been a failure, and those who feel that SOA has been a success.Those who tend to pink the Act, often times claim that the Act is unnecessary, and is besides expensive to implement. The most overbearing of all the criticizers of the summit claim that not only did the Sarbanes-Oxley Act fail, and also with its so called mission to ensure open financial record keeping and disclosure merely that it has also stifled new business discipline in the United States. Those who have deemed the SOA as being a success believe that more minute financial statements that are now being inclined(p) for public companies allow the shareholders a greater confidence in regards to their investments. Green, 2004)Conclusion In conclusion having the opportunity to do this paper, has really taught me a lot about the Sarbanes-Oxley Act. onward doing the research I can honestly assure that I had no idea what it was. My feelings on this Act is that I would more so deem it a success more than a failure for the saucer-eyed fact that it allows shareholders of large corporations that added confidence and comfort when it comes to transaction with their investments. Also, it helps the internal controls of companies which ultimately provides them more tools to stop dishonest activity.References Anand, S. (2004). The Sarbanes-Oxley guide for finance and information technology professionals by Sarbanes-Oxley group. Clifton, New Jersey CLA Publishing. Green, S. (2004). Managers guide to the Sarbanes-Oxley act up(a) internal controls to prevent fraud. Hoboken, New Jersey deception Wiley and Sons Inc.