The Sarbanes Oxley Act : Accounting Frauds Within Those Big Corporations

1311 Words Sep 25th, 2016 6 Pages
Question 1: The Sarbanes-Oxley Act was implemented due to big corporations mismanaging their business and accounting frauds within those big corporations (dummies). A big reason for implementing the Sarbanes-Oxley Act was due to Enron and their scandal back in 2001, there was fraud, embezzlement, illegal manipulation, pumped up earnings, and misrepresenting how the company was doing (enron). Enron was not the only company doing this, during this time and age companies were becoming larger and the economy was building with competitive companies with sketchy books of business. SOX (Sarbanes-Oxley Act) basically give a model for how a company should be run regardless of size or how it is owned. It spells out guidelines and regulations that publically traded companies are required to follow (dummies). SOX protects investors and keeps companies honest around disclosures, policies, and the activities of the company (baltzan). SOX also allows proper time for investigations when illegal activity has occurred (baltzan).
SOX has its critics on both sides. The critics for the act state that Congress has purposely compromised the act by withholding funds to enforce the act and passing bills that go against everything the bill stands for (enron). Those who oppose the bill mainly the big corporations state that the act increases costs on their end and it reduces the competitiveness in their respective industries (enron).
I believe the SOX Act is very good for America. I fully support…

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