An examination of the Sarbanes-Oxley Investor Protection Act of 2002, which establishes new guidelines for the securities industry.
Written in 2004; 7,951 words; 3 sources; MLA; $ 171.95
Paper Summary:
This report covers the Investor Protection Act of 2002, its development in Congress, its historical context, what it means to accountants and organizations, how it has developed in the last year, and how it is expected to develop in the future. Particular interest is paid to how it is expected to eliminate risk by preventing companies from certain moral hazards previously associated with the securities fraud that was feared to have become pandemic among equity analysts by late 2001. The report also questions whether the intrinsic problems associated with irrational exuberance and the issuing of recommendations are successfully addressed by the new legislation.
From the Paper:
"The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated last year in the Sarbanes-Oxley Investor Protection Act, which establishes new guidelines for the securities industry. Initially a Democratic brainchild, the act became favored by Republicans in the House when it was realized that such adjustments would be of great benefit to shareholder value in that they enhanced general financial stability. This is the most prominent piece of financial legislation since the establishment of the Securities and Exchange Commission in the early 1930?s. The most widely recognized feature of the new legislation, which was introduced in 1992, is that board members are held personally and criminally liable for the accounting practices that the company employees. This act also establishes guidelines as to the coverage of securities by sell-side analysts who face a conflict of interest in offering objective advice about the financial nature of companies that their firm is issuing debt."
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