The Sarbanes-Oxley Act Analysis

Congress passed in act in 2002, which was titled the Sarbanes-Oxley act. This act was created in order to protect investors, which includes shareholders and stakeholders from fraudulent accounting practices (Protiviti 2011). The creators of the Sarbanes-Oxley act were Paul Sarbanes, and Michael Oxley. The act was designed to provide regulation for financial practices, and to provide corporate governance. The idea behind the Sarbanes-Oxley act was to provide some time of governing body regarding accounting practices within business, and to hold everyone to the same standard. The main focus behind the Sarbanes-Oxley act is centered on auditing and internal control. Some changes were made to the Sarbanes-Oxley act, which changed methods used for auditing. These new strategies help to protect stakeholders from falsified accounting practices. The Sarbanes-Oxley act has created different responses from management and accountants. Both parties feel differently regarding what internal control measures should be taken. As an example, often, accountants are not allowed to get close to, or become involved in assessments of the companies’ assessment of risks. This sis done to keep the accountants from becoming …show more content…
Expenses have increased because new strategies and methods have been developed, to remain in compliance during audit procedures. The act created law in which the standards were created, and everyone was upheld to that same standard. Creating standards helped to save an industry that was suffering terribly. In addition to creating laws and holding everyone to the same standard, the act also helped to strengthen committees, and those committees often have huge leverage over management accounting decisions. As stated before, the act impacted management in a huge way due to expense. However, the extensive internal controls and reports help management, and lead to more success in the business