Sarbanes-Oxley Act

The Sarbanes-Oxley Act was established by the government after big corporations were filing for bankruptcy or closing their doors all together. The government could not understand how this was happening until they started investigating these company’s financial statements. There was wrong doing both financially and ethically in all these companies. The government decided that someone had to take responsibility and punishment needed to be established for what was happening. Ti was time for these companies to take the blame for what was happening in form of them. The legislation decided to make changes to the financial practice regulation and corporate governance. Senator Paul Sarbanes and Representative Michael Oxley headed the forming of the act.

There are many sections of the Sarbanes-Oxley Act; section 302 is stating who is responsible for the financial reports and what the consequences are. The CEO and CFO are responsible for the accuracy and submission of the financial reports. They are also responsible for the internal control structure. Companies are required to file reports periodically. Executives, financial officers, or any employee doing similar functions have to certify the reports filed. The officer that reviews the report has to sign it. They are signing swearing that the statements are true, no material is missing, and there is no misleading information. The condition of the company has to be represented in the financial statement. The officer who signs is responsible for internal control and has evaluated internal controls within the last ninety days and has reported any findings (www.soxlaw.com). Any information on fraudulent acts or deficiencies in internal control that involves employees must be reported. If there are any significant changes in internal control with a negative impact, it must be reported. The dealership I work for has never had an external audit by the government. We have had external audits from the vehicle...