Impact of Sarbanes-Oxley Act
Gloria Alvarez
Keiser University
Accounting Principles I
ACG1001
Professor Thorpe
October 18, 2015 Impact of Sarbanes-Oxley Act
The Act requires all financial reports to comprise an internal control report. This is intended to display that not only are the corporation's financial facts accurate, but the organization has self-assurance in them as satisfactory controls are in place to safety measure economic data. Year-end financial reports must include a valuation of the efficiency of the internal controls. The issuer's auditing organization is enforced to attest to that evaluation. The auditing organization does this after studying controls, tactics, and measures during a Section 4040 audit, lead along …show more content…
The act, drafted by U.S. Congressmen Paul Sarbanes and Michael Oxley, was aimed at successful corporate governance and accountability. Now, all public companies must comply with SOX.
The intent of the Sarbanes-Oxley Act is to protect stockholders by improving the exactitude and reliability of corporate disclosures made pursuant to the securities laws, and for other commitments, created new canons for corporate accountability as well as new punishments for acts of wrongdoing. It changes how corporate boards and administrators must interact with each other and with corporate auditors. The Act specifies new financial reporting responsibilities, containing adherence to new internal controls and procedures planned to ensure the validity of their financial records.
Numerous variants have taken place over the past eight years in almost every sphere of the business world. The first topic discussed within this paper will be the origin and …show more content…
Since its origin, Enron sustained burdensome debt. At times the financial state of the company promised success. However, Enron never fully recovered from the debt with which it was created. The negligence of internal control within Enron eventually led to the company’s demise . Although it is important for companies to monitor every section of SOX, there have been several sections that received more attention than others. A common section of the Sarbanes-Oxley Act is Title III, Corporate Responsibility. This portion of the legislature contains many imperative strategies regarding the duties of management, including certain audit committee requirements as seen in Section 301 (SOX, 2002).
In conclusion The Sarbanes-Oxley Action not only shakes the economic side of corporations, also the department charged with keeping a corporation's electronic records. The act is not an established business practice and does not state how a business should store records; fairly, it defines which records ought to be stored and for how long. SOX states that all business records, plus electronic records and electronic messages, must be saved for "not less than five years." The consequences for noncompliance are fines, imprisonment or
Gloria Alvarez
Keiser University
Accounting Principles I
ACG1001
Professor Thorpe
October 18, 2015 Impact of Sarbanes-Oxley Act
The Act requires all financial reports to comprise an internal control report. This is intended to display that not only are the corporation's financial facts accurate, but the organization has self-assurance in them as satisfactory controls are in place to safety measure economic data. Year-end financial reports must include a valuation of the efficiency of the internal controls. The issuer's auditing organization is enforced to attest to that evaluation. The auditing organization does this after studying controls, tactics, and measures during a Section 4040 audit, lead along …show more content…
The act, drafted by U.S. Congressmen Paul Sarbanes and Michael Oxley, was aimed at successful corporate governance and accountability. Now, all public companies must comply with SOX.
The intent of the Sarbanes-Oxley Act is to protect stockholders by improving the exactitude and reliability of corporate disclosures made pursuant to the securities laws, and for other commitments, created new canons for corporate accountability as well as new punishments for acts of wrongdoing. It changes how corporate boards and administrators must interact with each other and with corporate auditors. The Act specifies new financial reporting responsibilities, containing adherence to new internal controls and procedures planned to ensure the validity of their financial records.
Numerous variants have taken place over the past eight years in almost every sphere of the business world. The first topic discussed within this paper will be the origin and …show more content…
Since its origin, Enron sustained burdensome debt. At times the financial state of the company promised success. However, Enron never fully recovered from the debt with which it was created. The negligence of internal control within Enron eventually led to the company’s demise . Although it is important for companies to monitor every section of SOX, there have been several sections that received more attention than others. A common section of the Sarbanes-Oxley Act is Title III, Corporate Responsibility. This portion of the legislature contains many imperative strategies regarding the duties of management, including certain audit committee requirements as seen in Section 301 (SOX, 2002).
In conclusion The Sarbanes-Oxley Action not only shakes the economic side of corporations, also the department charged with keeping a corporation's electronic records. The act is not an established business practice and does not state how a business should store records; fairly, it defines which records ought to be stored and for how long. SOX states that all business records, plus electronic records and electronic messages, must be saved for "not less than five years." The consequences for noncompliance are fines, imprisonment or