Sarbanes Oxley Act 2002

Anna Hendryx September 14, 2010 Acc. 201 Sarbanes-Oxley represent 2002 Extra Credit Report heel Huber Introduction The Sarbanes-Oxley consummation of 2002 was a put in of legislation that came into effect in 2002 which introduced major changes to the regulations of the many financial practices as sanitary as corporate governance. This particular role of legislation was named after Senator Paul Sarbanes and deterrent example Michael Oxley. In this paper I give be discussing the overview, intended place, and whether or non SOA was a winner or failure. OverviewThe Sarbanes-Oxley comprise of 2002 has been deemed as existence the most remarkable change to securities laws since the 1934 Securities Exchange portrayal. The Sarbanes-Oxley wreak was sign-language(a) by President George W. Bush in 2002, and became effective on July 30th of that year. The Sarbanes-Oxley knead, which is actually much times referred to as SOX, was an act that narrow forth records management as soundly as retention policies for all popular companies. This particular act was enacted in retort to corporate craps that involved large corporations, the Enron scandal being one of the more than popular. Anand, 2004) The Sarbanes-Oxley Act requires all financial roots to include an ingrained control report. What an internal control report is designed to do is to show the attach tos financial data accurately. Companies construct confidence in these particular reports because its enough controls are in place at all times in distinguish to safeguard financial data. All closing financial reports must al ways pick up an assessment of the effectiveness of all internal controls. (Anand, 2004) Intended Purpose The intended purpose of the Sarbanes-Oxley Act was passed in the spot soft of major corporate scandals.What a mint candy of these scandals had in common were that they engaged in skewed reporting of selected transactions. For example companies such(prenominal) as E nron, Tyco, and WorldCom misrepresented a flesh of questionable transactions which ultimately resulted in very large losses for the stakeholders, of the companies, as soundly 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 elevate 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 juvenile levels of control and sigh-off which is designed to learn that financial reporting exercises the full revelation 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 handle to include both sides those who think that SOA has been a failure, and those who feel that SOA has been a succ ess.Those who tend to comment the Act, often times claim that the Act is unnecessary, and is too expensive to implement. The most exacting of all the criticizers of the bill claim that non only did the Sarbanes-Oxley Act fail, but to a fault with its so called mission to ensure honest financial record keeping and apocalypse but that it has also stifled new business development in the unite States. Those who have deemed the SOA as being a success believe that more exact financial statements that are now being prepared 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 truly taught me a lot about the Sarbanes-Oxley Act. onwards doing the research I can frankly say that I had no supposition what it was. My feelings on this Act is that I would more so deem it a success more than a failure for the mere(a) fact that it allows shareholders of large co rporations that added confidence and cherish when it comes to dealing with their investments. Also, it helps the internal controls of companies which ultimately provides them more tools to stop fraudulent activity.References Anand, S. (2004). The Sarbanes-Oxley guide for pay and information technology professionals by Sarbanes-Oxley group. Clifton, saucy island of Jersey CLA Publishing. Green, S. (2004). Managers guide to the Sarbanes-Oxley act improve internal controls to prevent fraud. Hoboken, New Jersey John Wiley and Sons Inc.