Audit: Sarbanes Oxley Act

WorldCom, Tyco International, Enron are some familiar name among financial scandals to the corporate world which involved a great debate that involving feedback resulting in a law put in place to reduce fraud. The Sarbanes-Oxley is a U.S. federal law which the chain of events dampen assurance of the public in many accounting and auditing firms. This law was named after Maryland Senator Paul Sarbanes and Michael G. Oxley a GOP Congressman. This law was passed by more than half of the Senate and Congress party in setting up to date guidelines for the director’s boards and the management of companies and structures of accounting in the U.S of companies that are traded publicly. The Sarbanes-Oxley made known the accountability of criminal acts a requirement by the Securities and Exchanges Commission or SEC agencies responsibility in regulations of securities market in the U.S. In support of this law people disagreed that this legislation was essential and beneficial, while others believed it would do more harm in economic damage than in preventing it. Significance about this act established a new private non-profit agency, "the Public Company Accounting Oversight Board," that held responsibility in reviewing regulatory practices, inspections and penalizations companies for audit.

Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors and make one (1) suggestion for improvement.

The government’s mission was to implement prevention of fraud and falsification from happening from fraudulent activity and accountants being held responsible for their actions and regulating ethical standards of the Sarbanes Oxley Act brought to legislature. In 2002 this act was put in place and introduces regulations for corporate governance and financial practice. This act also created new standards for corporate accountability and penalties for acts of malpractice and changed interaction between corporate boards and...