The Sarbanes-Oxley Act (SOX)

Paper Summary:

This paper discuses the Sarbanes-Oxley Act of 2002 (SOX), which was the result of the huge financial scandals of the 20th century and the early 21st century. The objective of this legislation was to beef up the credibility and the framework of publicly held companies. The author of the paper points out that the eleven titles of the act embrace tough corporate board responsibilities, which can lead to criminal penalties. The paper relates the benefits of SOX to the management of corporations, describes the most important titles and suggests procedures for compliance.

From the Paper:

"Title II is "Auditors Independence" and it has nine sections, giving rules for how auditors must be independent of the corporations so that conflicts of interest can be avoided. In fact, Section 201 of Title II tells auditing companies that they cannot do other kinds of business with the corporation, which they are providing auditing services for. This would seem to be an obvious thing that good standing companies would follow without a heavy handed federal law hanging over their heads, but in the age of Enron and WorldCom, it was needed."

Sample of Sources Used:

• Sarbanes-Oxley Act. "Sarbanes-Oxley Act 2002." Retrieved Dec. 12, 2007, from http://www.soxlaw.com.
• U.S. Securities and Exchange Commission. "Division of Corporation Finance: Sarbanes- Oxley Act of 2002 - Frequently Asked Questions." Retrieved Dec. 12, 2007, from http://www.sec.gov.
• Wikipedia. "Sarbanes-Oxley Act." Retrieved Dec. 12, 2007, from http://en.wikipedia.org.

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