Sox Act

Article Analysis

Sarbanes-Oxley Act

In late May of 2009, Beckstead and Watts, an accounting firm that the Public Company Accounting Oversight Board had accused of performing flawed audits, challenged the Sarbanes-Oxley act stating that, “the authors of the act set out to insulate the board from political pressure and went to far by letting the Securities and Exchange Commission appoint the members.” They contend that the act leaves the president with insufficient control and impinges on the president’s authority to make appointment, which violates the constitutional separation of powers.

The Sarbanes-Oxley Act was created to prevent other firms from modeling themselves after corrupt companies such as Enron and WorldCom, by failing to protect it’s core shareholders by producing reports that made the company seem more profitable and healthy. Even though this firm and many others see Sarbanes-Oxley as being a burden to an economy, that already has to attempt to keep up with other international economies that are booming, the act is one that changed the American economy for the better. The only problem for the people that aren’t in favor, is that the act protects and does the American people justice without causing any harm, since all it essentially does is make firms double check their paperwork and provide evidence for the totals that they come out with to provide to investors. Without it I honestly wouldn’t be surprised if the economy were in worse shape seeing as many companies do not want to be seen as going downhill and incurring net loses.

Without the act these companies could repeat what happened in the early 2000’s and produce false statements on their paperwork stating that they are in good standing and many of the investors should keep their stock instead of pulling out before they lose it. Even though many people see some downsides to the act, the benefits outweigh them and always will. As a testament to the need for stricter financial government...