Sarbanes Oxley Act: A Summary
Sarbanes Oxley Act of 2002,in summary, is one of the most debated acts of the 107th Congress of the United States. It was signed in July 2002, by President Bush. The reason for enacting this act is because the Bushs administration wanted to restore the confidence of the investors in the working of the publicly traded U.S. companies like Enron and WorldCom. The Act has brought major amendments to U.S. securities and business laws. Any Sarbanes Oxley Act summary cannot be complete without a mention of significant changes in the job responsibilities of auditors while ensuring steps to protect their safety, integrity and objectivity.
Sarbanes Oxley Act is popularly known as SOX or Sarbox. This is because the Act was sponsored by Democratic Senator Paul Sarbanes of Maryland and Republican Representative Michael G. Oxley from Ohio, a rare and historical moment, when parliamentarians worked together to find means to overcome the disturbing scandals pointing toward financial irregularities as opposed to the usual situation of politicians being at loggerheads. This momentous sense of national responsibility boosted the sagging spirit of the investors who came together even as the act was passed to boost the U.S. economy.
The Sarbanes Oxley Act gave a number of powers to the U.S. Securities and Exchange Commission but it also increased the responsibilities of the body. The Act has focused on corporate governance by making it accountable for its actions and by bringing transparency into the process of work.
|
With 11 titles, The Sarbanes Oxley Act comprises different sections ranging from establishment of the Public Company Accounting Oversight Board to ensuring the safety of the people who act as whistle blowers of any illicit activity in the company. The three major sections of the Act which are constantly discussed in the corporate circles are the Section 302 of the Sarbanes Oxley Act and Sections 404 and 409 of the Sarbanes Oxley Act. Section 302 of the Sarbanes Oxley Act defines the corporate responsibility that should be inherent in the financial reports. The act necessitates that the management should sign all the financial reports and certifies that these reports were made from data that was only passing through internal controls, which regulated the authenticity of data flow inside the company. The Section 404 of the Sarbanes Oxley Act deals with the assessment of the internal controls that were made part of the company functioning to regulate the flow of data inside the company. The section has introduced the new paradigm of Sarbanes Oxley auditing.The section is hotly debated in the corporate circle because it requires auditors and the management personnel to do regular analysis of the internal control systems and report about their reliability. The section has also been criticized severely for heavy cost of Sarbanes Oxley Act compliance. It has badly affected the small companies. The Sarbanes Oxley Act, in summary, is just 5 years old now but its sweeping, radical changes are still a hot topic of discussion in most corporate circles.It is still if with implementation of Sarbanes Oxley, Enron like incidents are put under check or not. |
Dolton, Mobile, Wilmette, Kankakee, Whitefish Bay, Lake Oswego, Metuchen, Fredericksburg, Franklin, Southfield, Birmingham, Camas, Oregon, Guam, Converse, Chesterfield, Cape Girardeau, Streator, Pontiac, Ossining, Nashua, Simpsonville, Arizona, Tamarac, Healdsburg, Cranston, Wisconsin, Upland, Crown Point, Alaska, Pottstown, St. Charles, La Habra, Campbell, Altus, Virginia Beach, Oak Forest, Burlington, Beverly, Grand Terrace, Sarasota, Kenmore, District of Columbia, Ogdensburg, Margate, Provo, Urbana, Smyrna, Clinton, San Fernando, Collinsville, San Angelo, Layton, Burbank, Oneida, Lauderhill, Washington, Cary, Beachwood, Poplar Bluff, Edmonds, Galion, Albert Lea, Mission, Lewiston, Chanhassen, Del City, Virginia, Colorado, Coshocton, Ohio, North Little Rock, Dobbs Ferry, Cumberland, Harper Woods, Westerville, Providence, Okmulgee
Whistleblower Protection - Spilling The Health And Safety Beans!By Bob R Gray Manager's Checklist For Transitioning to a Paperless OfficeBy Laurel Sanders The Evolution of HR AuditsBy Ronald Adler Creating a Records Management Policy That is Right For Your BusinessBy Laurel Sanders |