Sarbanes-Oxley Comparison of Articles

The Sarbanes-Oxley act was a brought about as a direct result of public concern over the major financial crimes such as WorldCom and Enron that had been plaguing the United States economy. The Sarbanes-Oxley Act, frequently known as SOX, was enacted on July 30, 2002 with a near unanimous vote from Congress. SOX focused on giving new requirements to public companies to prevent these types of financial crimes from happening again and to help ease public concern. SOX sought to achieve this by giving new requirements on the independence of auditors, forcing executives to be responsible and instituting penalties for crimes they may commit, internal controls and more transparent financial statements (Mont, 2012). The Sarbanes-Oxley Act also helped create the Public Company Accounting Oversight Board, PCAOB, to help watch over the aspects of SOX. When such swift and detailed financial reform is brought about there will be various positives and negatives. As with any law introduced there will be adamant supporters and steadfast detractors to the law.

Last summer the Sarbanes-Oxley Act was turning ten years old it provided the perfect opportunity to reflect on if SOX has truly been effective. The act was as much to provide a deterrent as it was used to help ease the feelings of investors after the tumultuous events that had been occurring with financial and accounting scandals. The government decided that the economy and financial markets had gotten so bad that they needed to step in to provide confidence to investors. The former Securities and Exchange Commission Chairman Christopher Cox thinks this is where the SOX succeeded the most, in restoring trust to the United States market. Cox had said that SOX “has changed the business world in mostly very positive ways, including strengthening audit committees and causing boards of directors of public companies to be more deeply engaged.” The former SEC Chairman believes that the directors of the public companies are now...