The Sarbanes Oxley ( Sox ) Act Of 2002 - 1617 Words

The focus of this week’s assignment is the Sarbanes-Oxley (SOX) Act of 2002. A brief historical summary of SOX will be presented, including the events leading up to its passage. The key ethical components of SOX will be identified and explained. The social responsibility implications of the mandatory publication of corporate ethics will be assessed. One of the main criticisms of SOX has been its implementation costs, and this specific criticism will be addressed in regards to smaller organizations. Finally, potential improvements to the SOX legislation will be explored, based on existing research in this area. Brief History of SOX Enactment The Sarbanes-Oxley Act of 2002 was created by Congress in response to financial scandals. There were several incidents which contributed to the need for legislature such as SOX. For purposes of brevity, the focus here will be on two of the largest financial scandals leading up to the passage of SOX, which are of those of Enron and WorldCom. In October 2001, Enron announced it was reducing after-tax net income by approximately $500 million shareholders’ equity by $1.2 billion. It also announced that it was restating net income for the years’ 1997-2001. In November 2001, Enron recognized in a federal filing that it overstated earnings by nearly $600 million since 1997. Within a month, they declared bankruptcy. It was discovered that many financial reporting issues were poorly disclosed or not disclosed at all. There were majorShow MoreRelatedThe Sarbanes Oxley ( Sox ) Act Of 2002926 Words   |  4 PagesThe Sarbanes-Oxley (SOX) Act of 2002 was legislated by Congress to restore reliability of financial statements with the objectives to raise standards of corporate accountability, to not only improve detection, but to also prevent fraud and abuse (Terando Kurtenbach, 2009). Additionally, SOX was the response to general failure of business ethics such as the propagation of abusive tax shelters and great er aggressive tax avoidance strategies (Raabe, Whittenburg, Sanders, Sawyers, 2015). Tax AdvantagesRead MoreThe Ethics Of The Sarbanes Oxley Act Of 2002 ( Sox )858 Words   |  4 Pagesfamily business could have implemented to refrain the perpetrators from fraudulent incidents, protect organizational assets and the organization’s going concern. Corporate fraud was the cornerstone for the strict implementation of the Sarbanes-Oxley Act of 2002 (SOX). SOX implements many compliance regulations, but one of its regulations, specifically Section 404, relates to an organization’s internal control procedures with the purpose of protecting organizational assets and investors’ interest. ConsequentlyRead MoreSarbanes Oxley Act Paper934 Words   |  4 PagesRunning Head: SARBANES OXLEY ACT Sarbanes Oxley Act Introduction Sarbanes Oxley Act is focused towards identifying accounting frauds in different public companies. This paper discusses about various reasons for the introduction of Sarbanes Oxley Act and causes that has been overlooked. Causes for Sarbanes-Oxley Act Sarbanes Oxley Act is US federal law, which is established in order to set out the some standards for accounting firms, public company boards and managementRead MoreThe Sarbanes Oxley Act Of 2002 Essay1070 Words   |  5 Pagesof Sarbanes-Oxley Act of 2002. This Act was placed into law to protect the consumer against fraudulent activity by organizations. This paper will provide a brief history of the law and discuss some of the ethical components and social implications on corporations. This research will provide information on how the Sarbanes-Oxley Act affects smaller organizations and how it encourages employees to inform of wrong doings. Brief Synopsis of Sarbanes-Oxley The U.S. Congress passed the Sarbanes-OxleyRead MoreEssay on The Sarbanes-Oxley Act852 Words   |  4 Pagestoday that are using the Sarbanes-Oxley (SOX) legislation that helps to safeguard their company and their financial records. The Sarbanes-Oxley act began in 2002 and the purpose behind this act was to protect organizations, it had a major impact on accounting and record keeping. Because of Enron, they passed this act for publicly-traded corporations to better implement control to their enterprise data. â€Å"Named after Senator Paul Sarbanes and Representative Michael Oxley, who also set a number ofRead MoreThe Implications of the Sarbanes Oxley Act on the Accounting Profession755 Words   |  4 PagesThe Implications of the Sarbanes Oxley Act on the Accounting Profession Abstract On July 30, 2002, the Sarbanes Oxley Act (also known as SOX) was signed into law by President George W. Bush. The Sarbanes Oxley Act of 2002 is a federal law that set new or improved standards for all U.S. public company boards, management and public accounting firms. Covered in the eleven titles are additional corporate board responsibilities, auditing requirements and criminal penalties. ThisRead MoreThe Sarbanes-Oxley Act of 20021668 Words   |  7 PagesThe Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 The Act Impact ACC 410, Jackie Lewis, Ph.D. Abstract The Sarbanes-Oxley Act, officially named the â€Å"Public Company Accounting Reform and Investor Protection Act of 2002†, is recognized to be the most noteworthy U.S. federal disclosure and corporate governance legislation since the Securities Act of1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act). Furthermore, the provisions of the Act areRead MoreThe Sarbanes Oxley Act ( Sox ) For A Company1461 Words   |  6 Pagesto try to describe the cost and benefits of implementing the Sarbanes Oxley Act (SOX) for a company. I will then move on to describe what it is, how to go about it, and what a company may need to properly implement it. The Sarbanes Oxley Act was approved and activated in 2002 to protect investors and to renew confidence in American companies from what happened with the fall of companies like Enron, HealthSouth, and WorldCom. This act was trusted to fix or find corruption in the companies and makeRead MoreSarbanes-Oxley Act of 2002985 Words   |  4 Pages Sarbanes-Oxley Act of 2002 Week # 2 Individual Assignment â€Æ' Sox Key Main Aspects for a Regulatory Environment Sarbanes-Oxley Act was passed in 2002 by former president George Bush. Essentially to combat the Enron crisis. The Sox Act basically has regulatory control and creates an enviroment that is looking out for the public. Ideally this regulatory environment protects the public from fraud within corporations. Understanding, that while having this regulatoryRead MoreThe Disadvantages of the Sarbanes-Oxley Act of 2002712 Words   |  3 PagesSarbanes-Oxley Act of 2002 Introduction The many financial scandals of the late 1990s and the early 21rst century served as the catalyst for U.S. lawmakers writing and ratifying the Sarbanes-Oxley Act of 2002 (SOX). Originally written to avert financial scandals including Enron, Tyco and others, SOX quickly became an impediment to the growth of smaller firms especially, who did not have the staff available to meet complex, often ill-defined requirements (Griffin, 2007). The intent of this analysis