The Sarbanes-Oxley Act

Paper Summary:

The paper examines how the Sarbanes-Oxley Act was designed mostly to protect investors and their interests and also guard the public interest by helping to form and prepare accurate and informative audit reports for companies that are publicly traded. It looks at related issues such as corporate responsibility and codes of ethics and discusses how it took the collapse of Enron and other corporations and the fraudulent accounting practices to create the changes that constitute the act today.

From the Paper:

"The registration of public accounting firms and the conducting of inspections are other things that the Board must involve itself with, as well as investigating and disciplining firms that may be in violation of some of these rules and therefore not treating investors properly (Koehn & Del Vecchio, 38). Before the Act was created, there were not as many instances where these firms could be punished, and no one was checking up on them very closely. Because people were not checking up on them, they were getting away with so many things. When Enron and many other companies began to have trouble and their questionable accounting practices came to light, it became clear that there were changes that must be made, which largely led to the creation of the Act."

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