Sarbanes-Oxley Act

Paper Summary:

This paper discusses the Sarbanes-Oxley Act, the reason for its passage, the meaning of the law, and the possible consequences it may have on investor confidence. The paper notes that it was signed on July 30, 2002 in order to increase public confidence in the nation's capital markets after a number of accounting scandals such as Enron and Global Crossing, and the effectiveness of law being dependant on it's application.

From the Paper:

"The Sarbanes-Oxley Act was signed on July 30, 2002 in order to increase public confidence in the nation's capital markets and "imposes new duties and significant penalties for non compliance on public companies and their executives, directors, auditors, attorneys and securities analysts" (Conference of State Bank Supervisors para. 1). What the full implications of this legislation may be known only after various actions by the Securities and Exchange Commission and the newly created Public Company Accounting Oversight Board: "Most of the provisions of this new law only apply to public companies that file a form 10-K with the Securities and Exchange Commission their auditors and securities analysts" (Conference of State Bank Supervisors para. 1). "

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