The Sarbanes Oxley Act Of 2002 Essay

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The Sarbanes-Oxley Act of 2002 is a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms. This was made in direct reaction to the financial crisis of the early 2000’s. The act was named after U.S Senator Paul Sarbanes and U.S Representative Michael G. Oxley. As a result of SOX, top management must individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Also, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements (Kimmel 2011).” This means that all financial decisions in a company must be signed off by top management and people within a company cannot make financial decisions to help bolster their numbers without oversight from people above. It mean that people are responsible criminally for the things that report. This means that if you are knowingly signing off on something that is fraudulent you can be prosecuted for you actions. The Sarbanes–Oxley Act has several elements that it put in place to make sure that proper oversight is being used for publicly traded companies. These elements are all important in their own rights and together make for a financial environment where fraud is a lot less rampant
The first element or Title 1 is a Public Company Accounting Oversight Board. The Public…

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