Essay about Sarbanes Oxley Act Of The United States

902 Words May 15th, 2016 4 Pages
Sarbane-Oxley Acts originated in the United States after the stock market upheaval caused by the collapse of Enron, investors had been withdrawing stock, to prevent financial scandals and ensure that companies do not occur by the US House of Representatives and US senators. Congress enacted the Sarbanes-Oxley Act of 2002 the act imposes new responsibilities on corporate management and criminal sanctions on those managers who disregard the law. It makes securities fraud a serious federal crime and increases the penalties for white-collar crimes. In addition, it creates a new oversight board for the accounting profession. Sarbanes-Oxley Act is an act passed by US congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. It mandated strict reforms to improve financial disclosure from corporation and prevent accounting fraud.
The Sarbanes-Oxley Act also authorizes the establishment of a public Company oversight board, which will oversee the accounting profession. It also establishes stricter criminal penalties for securities fraud and changes how public accounting firms operate their business. It requires public companies to strengthen audit committees, perform internal control tests, set personal liability of directors and officers for the accuracy of financial statements, and strength disclosure.
Under the act, the SECURITIES AND EXCHANGE COMMISSION (SEC) has the authority to prohibit, conditionally or unconditionally,…

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