A 5 page paper on the impact Sarbanes Oxley has on business todayno late paper please

Impact Sarbanes Oxley has on business 1
Impact Sarbanes Oxley has on business
Impact Sarbanes Oxley has on business 2
Impact Sarbanes Oxley has on business
Introduction
The wave of financial scandals in 1990‟s and 2000 „s left a question on the reliability of
the financial statements of the corporates along with the regulating corporate governance and the
accounting profession of the country. The investors got highly concerned about the scandals,
with this the investors lost all the faith and confidence on investment which smashed the stock
market.
After different scandals that took place in United States concerning different companies
such as Enron, WorldCom, Tyco etc., the government of America enacted the Sarbanes-Oxley
Act in the year 2002 which focused on protection against accounting frauds and different
financial malpractices. With the announcement of Sarbanes Oxley act on July 25
th
‟ 2002, the
stock market indices of the large capitalization stocks had fallen down by 40 percent.
The Sarbanes Oxley is the act which focuses to fixing different auditing effects of the US
organization. The main focus of this act is brings accurate and reliable picture of the company.
The companies need to present its financials accurately. The act focused on the accuracy of the
financial reporting and made the management of the firm personally responsible for the accuracy
of the financial system. This act helped in safeguarding the interests of the investors who invests
in the stocks of the company. This act strongly focuses on internal control of the organization in
terms of accounting. Sarbanes-Oxley Act has brought out several laws in respect of corporate
responsibility, responsibility and regulations of auditors, and enhanced disclosure policies for the
organization.
Impact Sarbanes Oxley has on business 3
Sarbanes Oxley Act
The act focused on making new law and changing the existing laws in many ways, it
imposed different mandates which became compulsory for the publically traded organization to
follow. It also focused on enhancing the role of the auditors so as to enforce the law against the
fraud and theft the public companies. So as to have a strong focus on the financials of the public
traded companies, Sarbanes Oxley focused on creating a unique, quasi-public institution which
aimed to oversee and regulate the auditing of the company.
There are different sections and provisions that are compulsory for all the registered
companies to follow. There are nine set of mandates that needs to be followed by the companies
registered.
Sections Topics
101-109 PCAOB‟s creation, oversight, funding, and tasks
302, 401–406, 408–409, 906
New disclosure rules,...