Sarbanes-Oxley Act the Dodd-Frank Wall Street Reform and Consumer Protection Act

Before the Sarbanes-Oxley Act was passed in 2002, there was a lot of accounting scandals, falsifying financial reports. Because of this abuse it increased public and political demands to improve ethical standards in business. To address the loss of confidence in financial reporting and corporate ethics, Because of all the ethics violation caused Congress passed the Sarbanes-Oxley Act was passed in 2002. With the new law made securities fraud a criminal offense and stiffened penalties for corporate fraud. It also created an accounting oversight board that requires corporations to establish codes of ethics for financial reporting and to develop greater transparency in financial report to investors and other interested parties. Additionally, the law requires top executives to sign off on their firms' financial reports and risk fines and long prison sentences if they misrepresent their companies' financial positions. The legislation further requires company executives to disclose stock sales immediately and prohibits companies from giving loans to top managers. The new consequences for ignoring the SOX law is The SOX act created new criminal offenses and amended penalties for existing federal offenses. Overall, these provisions bolstered the sanctions the Securities and Exchange Commission can impose, and as a result increased its leverage over the companies it investigates. Several sections of the act created new offenses to Title 18 of the U.S. Code in the area of obstruction of justice. Section 802 prohibits the knowing alteration, destruction or falsification of documents or records for any existing or contemplated federal investigation or bankruptcy proceeding and provides for fines or imprisonment of up to 20 years, or both. Section 302 obligates auditors and accountants to maintain corporate audit records and work papers for five years or face fines or imprisonment of up to 10 years, or both. Section 1102 prohibits the alteration, destruction or concealment of a...