Essay about Sarbanes-Oxley Action of 2002

Ibrahim 1

Policy Daily news on the Sarbanes-Oxley Act of 2002 Randy Ibrahim [SID: 860866350] Organization 102 December 09, 2010 Dr . Esten D. Jasso

Ibrahim 2 Table of Contents Introduction………………………………………………………………………………3 History of the Act………………………………………………………………………... four Corporate Scandals………………………………………………………………. 4 Loss of Investor Confidence…………………………………………………….. 4 Marketplace Failure and Government Intervention……………………. …………….. five Why Sarbanes-Oxley was Necessary……………………………………………. 5 Employing Sarbanes-Oxley…………………………………………………………... 6th Title I-XI…………………………………………………………………….... 6-11 Influence on Business and Society………………………………………………………... 11 Impact on Business……………………………………………………………... 11 Effect on Society………………………………………………………………. 12 Policy Analysis…………………………………………………………………………. 12 Did It Work?........................................................................................................ doze Strengths and Weaknesses …………………………………………………….. 13 Recommendations for Future Coverage Makers.. …………………………………14 Conclusion……………………………………………………………………... 13

Ibrahim several Introduction The Sarbanes-Oxley Take action of 2002, also known as the population Company Accounting Reform and Investor Security Act of 2002, can be described as federal law enacted reacting to company and accounting scandals that led to bankruptcies and extreme stock losses. Corrupt corporations, particularly Enron, WorldCom and Tyco, had been acting underhanded by assigning accounting mistakes and fraudulent practices by simply management which usually led to scandals in 2001. The scandals impacted traders, who shed billions of dollars when the inventory prices plummeted, and the public shed confidence inside the capital markets. The main proponents of the regulation are Consultant Michael Oxley and Senator Paul Sarbanes, both who combined their very own respective law to form the Sarbanes-Oxley Take action of 2002. The goal was to enhance the accuracy and reliability of corporate disclosures. The law was quickly exceeded to correct the organization scandals involving companies including Tyco, WorldCom and Enron. The effect of the scandal weakened the stock markets which will resulted in investors having low certainty and confidence. The Sarbanes-Oxley Work requires businesses to follow a strict guideline in disclosure of financial data. The law plans for companies to conduct accounting practices with a excessive degree of integrity. The law consists of eleven games, which try to strengthen monetary disclosures, enhance corporate responsibility and accountability, and increases punishment intended for criminal scam offenses. These types of eleven games are the base in eliminating corporate scandals and in raising the assurance of the open public. SOX is important in order to reform corporate ethical behavior and the main target of this project is to share the effectiveness of the policy searching at the history of the law, search for its rendering, grasp the influence on business and society, and analyze the results.

Ibrahim 4

Good the Take action

Corporate Scams Corporations, such as WorldCom and Enron, had been very powerful enterprises that provided many jobs for people and had very high share prices. Enron was probably the most profitable electrical companies in the world. However , Enron, as well as other corporations, had unethical executives who have lacked values in financial audits. The desire for profitability was achieved at the expense of the firm's ethical ideals. Enron is a situation where system failed at every stage. " The executives misinformed everyone, the board did not catch that, and the auditing firm chosen not to do all their duty sufficiently. ” (" Accounting reform and trader protection, ” 2003) These kinds of poor business ethics ended up high executives of Enron and Enron's accounting company Arthur Anderson to be billed with criminal offenses, just like financial scams for camouflaging the business debt and loses in accounting and financial assertions. Enron and other corrupt corporations had brought on enormous task losses and shareholders were affected by the decline from the share...

Recommendations: Carroll, Archie. (2009). Business and contemporary society: ethics and stakeholder managing. Mason, OH: South-Western Cengage Learning. Para Kluyver, C. (2009). A primer in corporate governance. NY: Business Expert Press. Jasso, Esten. (2009). Sarbanes-Oxley – context & theory: market failing, information asymmetry & the truth for legislation. Journal of Academy of Business and Economics, Amount 9. LexisNexis. (2006). The Sarbanes-Oxley Act of 2002. Matthew Bender & Business, Inc. Nelson, Edward. (2007). The impact of Milton Friedman on modern day monetary economics. Cambridge, Mass.: National Bureau of Economical Research Us. Congress. United states senate. Committee about Banking, Housing, and Downtown Affairs. (2003). Accounting reform and entrepreneur protection Volume. 1 . Buenos aires: U. S i9000. G. G. O. United States. Congress. United states senate. Committee about Banking, Housing, and City Affairs. (2005). Implementation in the Sarbanes-Oxley Take action of 2002: hearings prior to Committee about Banking, Enclosure, and Downtown Affairs. Wa: U. T. G. S. O. United States. Congress. Property. Committee on Financial Services. (2005). The impact with the Sarbanes-Oxley Work. Washington: U. S. G. P. O. United States. Congress. House. Committee on Federal government Reform. Subcommittee on

Ibrahim 19 Regulatory Affairs. (2006). The Sarbanes-Oxley Act 4 years later on: what possess we discovered? Washington: U. S. G. P. O. United States. Congress. House. Committee on Government Reform. Subcommittee on Regulatory Affairs. (2007). A handling act: expense, compliance, and competitiveness following Sarbanes-Oxley. Buenos aires: U. H. G. L. O. United states of america. Congress. Senate. Committee about Small Business and Entrepreneurship. (2007). Sarbanes-Oxley and small business: responding to proposed regulating changes and the impact on capital markets. Wa: U. S i9000. G. G. O.