This act was enacted to address corporate governance and the accuracy of financial reporting, The Sarbanes-Oxley Act of 2002 is one of the most important laws impacting public corporations to be passed in decades. It establishes how corporations should conduct business and how they should manage their finance and accounting processes.
The act was established to diminish financial scandals in business; and to protect investors from the possibility of fraudulent accounting activities. Among other requirements, the act calls for the establishment of a Public Company Accounting Oversight Board, where public companies must be registered; heightened corporate responsibility for any fraudulent actions taken; and stricter disclosure within company financial statements and ethical guidelines to which senior financial officers must adhere.
|