Essay On The Sarbanes-Oxley Act

Running head: SARBANES-OXLEY LAW

Sarbanes-Oxley Law
Alexandria B. Lover
Liberty University
ACCT 302-B03

Abstract Since 2002, the Sarbanes-Oxley Act has been in place to not only raise awareness for employees and investors but also improve the management of internal controls in public corporations. Under the law, CEOs and CFOs are solely responsible for the accuracy of the financial reporting by their companies as well as the internal control structure to include fines and criminal prosecution if consciously falsified. The Sarbanes-Oxley Act was passed as a response to the Enron fiasco in an attempt to protect investors from corporate accounting fraud. The Act, which is officially known as Public Company…show more content…
Sarbanes-Oxley Act reiterates the importance of the cost of law to the companies and to the future of the economy by placing officers in charge of such obligations. “These officers require lower-level employees to certify accuracy of those portions of the financials for which they are responsible, and are creating a practice of a series of meetings down the line to discuss control issues” (Carney, 2006, p 144). Many other sanctions have been put into place to regard the cost of owning a business and the importance of safekeeping of financial records. “The law also forbids corporate loans to officers and directors, requires issuers to disclose a code of ethics for senior financial officers or explain why one has not been adopted, and prohibits adverse employment actions against whistle-blowers” (Carney, 2006, p 144). The adaptation of pushing such a law into firm action can make for either a better future for the economy or for a fiscal cliff as it is now…show more content…
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