Sarbanes-Oxley Act of 2002 Acc 561
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Sarbanes-Oxley Act of 2002
ACC 561
Sarbanes-Oxley Act of 2002
Even though the standards for the Sarbanes-Oxley Act (SOX) of 2002 are still evolving, the new regulatory environment generated in its wake will now protect the public and the market from fraud within corporations. This paper will discuss the main aspects of the SOX, its imposed requirements and its effectiveness in avoiding future fraud.
By the close of 2002, the world was experiencing the full effect of the financial hardship in the wake created from the corporate fraud of Enron, WorldCom, Tyco, Adelphia, and Peregrine Systems. SOX of 2002 was both a Senate and House of Representatives congressional gut reaction to put in place a bill that provides corporate governance under a new regulatory environment that provides prevention or protection against corporate and accounting fraud. This enacted federal law provides the U.S. business world with new or enhanced regulatory standards for all U.S. public companies, management teams and public accounting firms. This act affects all publicly traded companies in the United States, including all wholly owned subsidiaries, and all publicly traded non-US companies doing in business in the US (Sarbanes-Oxley-101.com, 2011). Specifically, SOX is preventing future frauds by establishing new accountability standards for corporate boards and auditors, establishing a Public Company Accounting Oversight Board (PCAOB) under the U.S. Security and Exchange Commission (SEC), and proving specified civil and criminal penalties for noncompliance (Sarbanes-Oxley-101.com, 2011). SOX 2020 leads SEC with oversight and lead administrator of the act. The SEC also sets deadlines for compliance and publishes rules as required. There are eleven titles of the SOX Act of 2002 (107th Congress, July). Sections 101, 302, 401, 404 and 409 (detailed below) are the main imposed requirements of SOX. Sections 802 and 906 detail the penalties and the incentive to avoid future fraud.
TITLE...
ACC 561
Sarbanes-Oxley Act of 2002
Even though the standards for the Sarbanes-Oxley Act (SOX) of 2002 are still evolving, the new regulatory environment generated in its wake will now protect the public and the market from fraud within corporations. This paper will discuss the main aspects of the SOX, its imposed requirements and its effectiveness in avoiding future fraud.
By the close of 2002, the world was experiencing the full effect of the financial hardship in the wake created from the corporate fraud of Enron, WorldCom, Tyco, Adelphia, and Peregrine Systems. SOX of 2002 was both a Senate and House of Representatives congressional gut reaction to put in place a bill that provides corporate governance under a new regulatory environment that provides prevention or protection against corporate and accounting fraud. This enacted federal law provides the U.S. business world with new or enhanced regulatory standards for all U.S. public companies, management teams and public accounting firms. This act affects all publicly traded companies in the United States, including all wholly owned subsidiaries, and all publicly traded non-US companies doing in business in the US (Sarbanes-Oxley-101.com, 2011). Specifically, SOX is preventing future frauds by establishing new accountability standards for corporate boards and auditors, establishing a Public Company Accounting Oversight Board (PCAOB) under the U.S. Security and Exchange Commission (SEC), and proving specified civil and criminal penalties for noncompliance (Sarbanes-Oxley-101.com, 2011). SOX 2020 leads SEC with oversight and lead administrator of the act. The SEC also sets deadlines for compliance and publishes rules as required. There are eleven titles of the SOX Act of 2002 (107th Congress, July). Sections 101, 302, 401, 404 and 409 (detailed below) are the main imposed requirements of SOX. Sections 802 and 906 detail the penalties and the incentive to avoid future fraud.
TITLE...