U.s. Sarbanes Oxley Act - 1611 Words

The world has witnessed a series of corporate bankruptcies in the recent decades like Enron, Lehman Brothers Inc, Global Crossings, and Tyco in the USA; HIH in Australia, Parmalat in Italy, APP in Asia, and Islamic bank Ltd. of South Africa. These collapses have weakened and shaken the confidence of shareholders, debtors, governmental institutions, and other similar relevant stakeholders in corporate governance (CG) and the stock markets, and led to regulating many reforms and codes of best governance practices all over the world, to strengthen transparency and restore confidence in financial markets (Barros et al., 2013). For instance, after the financial failure of Enron and dissolution of Arthur Anderson; one of the five largest audit and accountancy partnerships in the world, U.S enacted the Sarbanes-Oxley act of 2002; France regulated the financial security law of 2003, as many other countries developed a set of regulations in the aftermath of huge corporate scandals. In Additi on, the integration and globalization of financial markets also has given significance and highlighted the importance of CG as claimed by Srinivasan Srinivasan (2011). Consequently, many studies on the CG have justified their argument on the existence of information asymmetry between managers and stockholders of the company based on the agency theory, which is defined as a contract under which one party (the principal) delegates another party (agent) to perform some services on their behalfShow MoreRelatedSarbanes Oxley Act1322 Words   |  6 PagesSarbanes-Oxley Act The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and coversRead MoreSarbanes Oxley Act and the PCAOB Essay1661 Words   |  7 PagesThe Sarbanes-Oxley Act Overview: The development of the Sarbanes-Oxley Act (SOX) was a result of public company scandals. The Enron and Worldcom scandals, for example, helped investor confidence in entities traded on the public markets weaken during 2001 and 2002. Congress was quick to respond to the political crisis and enacted the Sarbanes-Oxley Act of 2002, which was signed into law by President Bush on July 30 (Edward Jones, 1), to restore investor confidence. In reference to SOX, penaltiesRead MoreSarbanes Oxley Act of 2002: A Response to High-profile Corporate Failures1919 Words   |  8 PagesSurbanes Oxley Act 2002 Historical forces have a way of acting in concert, even when propelled by markedly different factors. In the United States, a spate of astonishing high-profile corporate failures have shaken investor confidence and placed corporate fraud and accounting abuses center stage before the public and its governmental representatives. The legislative response to these events was the rapid passage of the Sarbanes- Oxley Act (the Act) of 2002, which virtually overnight transformedRead MoreThe Implications of the Sarbanes Oxley Act on the Accounting Profession755 Words   |  4 PagesThe Implications of the Sarbanes Oxley Act on the Accounting Profession Abstract On July 30, 2002, the Sarbanes Oxley Act (also known as SOX) was signed into law by President George W. Bush. The Sarbanes Oxley Act of 2002 is a federal law that set new or improved standards for all U.S. public company boards, management and public accounting firms. Covered in the eleven titles are additional corporate board responsibilities, auditing requirements and criminal penalties. ThisRead MoreSarbanes Oxley Outline676 Words   |  3 PagesThe Ineffectiveness of the Sarbanes Oxley Act In Corporate Management and Accounting In the early 1990s, a young company named Enron was quickly moving up Fortune magazine’s chart of â€Å"America’s Most Innovative Company.† As the corporate world began to herald Enron as the next global leader in business, a dark secret loomed on the horizon of this great energy company. Aggressive entrepreneurs eager to push the company’s stock price higher and a series of fraudulent accounting procedures involvingRead MoreAcc499 Written Assignment1534 Words   |  7 Pagessecretly funneled millions of shares of the company’s stock to entities in Gibraltar which they secretly controlled. Those entities then sold off the stocks and had the funds transferred to people and companies associated with Mr. Lee and Mr. Boyne (U.S. Securities and Exchange Commission, 2012). The Securities and Exchange Commission charged three executives of Electronic Game Card Inc. and their independent auditor with continually lying to investors about the operations and financial conditionRead MoreLge 500 Week 10 Discussion 12 Essay2300 Words   |  10 PagesUnderlying Causes Please respond to the following: Analyze at least three underlying causes for the creation of the Sarbanes-Oxley Act. Next, rank the causes that you have analyzed from the most important to the least important to the creation of the Act. Explain your rationale. In the later part of 1990s, there was an epidemic of accounting scandals which arose with the disclosure of financials transgressions by trusted corporate executives. The misdeeds involved misusing or misdirectingRead MoreEnron Research Paper3111 Words   |  13 PagesENRON amp; THE INTRODUCTION OF THE SARBANES OXLEY ACT BY TREVOR GARRETT 02/25/2011 Abstract Enron Corporation was one of the largest energy trading, natural gas and Utilities Company in the world that was based in Huston, Texas. The downfall of Enron is one of the most infamous and shocking events in the financial world, and its reverberations were felt around the globe. Prior to its collapse in 2001, Enron was one of the leading companies in the U.S and considered among top 10 admiredRead MoreAnalysis of the Sarbanes-Oxley Act3143 Words   |  13 PagesAnalysis of the Sarbanes-Oxley Act Abstract The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.    In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.    Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial OfficerRead MoreSox Research Paper2060 Words   |  9 PagesSeminar in Accounting ACC499 004016 Summer 2009 Nonprofits and the Sarbanes Oxley Act Submitted: Submitted to: Tee M. Thein Table of Contents Abstract Introduction SOX regulations for nonprofits Reasons for nonprofits to adopt SOX Conclusion Research file memorandum Communication memorandum References Abstract Introduction The Sarbanes-Oxley Act (SOX) of 2002 (U.S. House of Representatives 2002) was passed by congress as a result of