Sarbanes-Oxley Act

Running head: SARBANES-OXLEY ACT

Sarbanes-Oxley Act

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Abstract

In the review of the major provision of the Sarbanes-Oxley Act of 2002 that deal with ethics and independence in business conduct the paper will split the major elements into several titles related to the subject topic. The major provisions relating to ethics and independence are illustrated below:

* Public company Accounting oversight board (PCAOB)- has nine sections which emphasize on the role of PCAOB to provide an independent oversight of public accounting firms and auditors. The section provides the guidelines to the independent process of auditor registration and regulation of quality controls.

* Auditor independence- has nine sections also which provide the standards necessary for auditor independence and minimize the probability of the occurrence of a conflict of interest.

* Corporate responsibility-this element s covered by eight provisions of the SOX act to mandate senior executives to take individual responsibilities to enhance accuracy and timely completion of corporate financial reports.

* Financial disclosures- under this title, there are nine sections of the Act which describes the acceptable accounting and financial reporting requirements for financial transactions. The act under this title provides for internal controls to ensure accuracy of financial reports and disclosures which is an aspect of business ethics.

The paper will also focus on the impact the Act has had on the conduct of audits since its establishment in 2002 and how it has been of benefit to the auditing profession. From the review of the act and the impacts on the Act, a firm conclusion will be established and a few recommendations that would be important to streamline the Act.

Introduction

The Sarbanes-Oxley (SOX) was enacted in a reaction to several major accounting and corporate scandals in the USA which cost the investors billions of dollars...