The Sarbanes-Oxley Corporate Reform Act 2002 Essay

The Sarbanes-Oxley Corporate Reform Act 2002

The Sarbanes-Oxley Corporate Reform statute was passed by the United States Congress in the year 2002 before the midterm elections, the principal goal of the Act being to rebuild investor confidence and to protect capital markets at a time when huge corporate governance debacles plagued America.  The front page headlines around the nation were reading that firms such as Worldcom, Enron, Global Crossing and Arthur Anderson had failed to meet their investors’ expectations of straightforward transparency in financial affairs.  The Sarbanes-Oxley Act specifically empowered the Securities Exchange Commission, IRS, and the Public Company Accounting Oversight Board to handle the problem (“The Sarbanes-Oxley Act and Implications for Nonprofit Organizations”).

We will write a custom essay sample on
The Sarbanes-Oxley Corporate Reform Act 2002
specifically for you for only $13.9/page
Order now

More Essay Examples on USA Rubric

     To counter fraudulent accounting practices and executives’ self-dealing transactions the dramatic likes of which were discovered in the cases of Enron and Worldcom, the Sarbanes-Oxley Act was a necessary step taken by the government.  In order to increase the accurateness as well as reliability of auditing practices, accounting, and corporate reporting, one of the provisions of the Act is for financial reports to be certified by chief executive officers and chief financial officers of the corporation.  In other words, the law holds chief executive officers and chief financial officers directly accountable for mismanagement in financial matters.  The validity of a company’s financial statements is the responsibility of these chiefs.  In effect, the Act makes them legally accountable for their firm’s financial practices.  This means that there are no grounds any longer for excuse-making or claiming ignorance when disaster strikes, as in the circumstances of Enron and Worldcom that entered bankruptcy proceedings (“The Sarbanes-Oxley Act and Implications for Nonprofit Organizations”).  What is more, for organizations that are determined about fair dealing to begin with, the Act is a blessing for it allows the chiefs to check managerial fraud better than before.

Works Cited

“The Sarbanes-Oxley Act and Implications for Nonprofit Organizations.” GuideStar - The Sarbanes-Oxley Corporate Reform Act 2002 Essay introduction. 2009. 22

Feb 2009. <http://www.guidestar.org/DisplayArticle.do?articleId=883>.

 

Choose Type of service

Choose writer quality

Page count

1 page 275 words

Deadline

Order Creative Sample Now

Haven’t Found A Paper?

Let us create the best one for you! What is your topic?

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.

Eric from Graduateway Hi there, would you like to get an essay? What is your topic? Let me help you

logo

Haven't found the Essay You Want?

Get your custom essay sample

For Only $13.90/page