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Sarbanes-Oxley Problem Essay

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Below is an essay on "Sarbanes-Oxley Problem" from Anti Essays, your source for research papers, essays, and term paper examples.

Sarbanes-Oxley Problem
The federal government in 2002 enacted the Sarbanes-Oxley Act (SOX) in order to reform accounting standards for publicly owned entities in the United States. Compliancy remains an issue not only for small organizations, but also with small businesses. This is mostly because of a lack of understanding that the managers have of the SOX. The benefits of SOX are debated among accounting professionals and supporters argue that the legislation has helped to restore the public’s confidence in capital markets by strengthening corporate accounting controls. Non-supporters argue that SOX has decreased the international competitiveness against foreign financial service providers by overly regulating U.S. financial markets. The purpose of this paper is to identify major provisions, address arguments, and assess the impacts and ethical considerations of the SOX.
Major Provisions
SOX was designed to better “protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws and for other purposes” (AICPA, 2009). The SOX act initiated many provisions. According to Aldridge and Kerr (2009), the major provisions include:
• Creation of a Public Company Accounting Oversight Board
• New Roles for Audit Committees and Auditors
• Criminal Penalties
• Protection for Whistleblowers
• Financial Reporting and Auditing Process changes
• Certification by CEO and CFO
Section 302 of SOX relates to corporate responsibility and mandates that individuals signing financial reports have viewed and agree to the contents of the report. This section mentions that financial information must be fully disclosed and statements are not to be misleading or untrue while fairly presenting the true financial health of the entity. Signing officers are also required personally to monitor internal controls. By signing the financial statements, this individual is reporting that the accountants have adequately...

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APA Citation

Sarbanes-Oxley Problem. Anti Essays. Retrieved December 19, 2018, from the World Wide Web: http://snehaedu.com/free-essays/Sarbanes-Oxley-Problem-62341.html