Sox Act Research Paper

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Matt LaFlamme Bus law 9am The Sarbanes–Oxley Act, also known as SOX was enacted July 30, 2002. SOX is administered by Securities and Exchange Commission, which sets time limits for compliance and publishes rules on requirements. SOX is not a business practice and does not regulate on how a business should store their records, it defines which records need to be stored and for how long they need to be stored. SOX was enacted due to the reaction of multiple major corporate and accounting scandals, which include Enron , Tyco international and WorldCom. These scandals cost investors billions of dollars when the share prices of affected companies collapsed, and shook the publics’ faith in the security markets. When examining the SOX act you can see that since 2002 many things have changed in the past eight years. Corporate governance is one of many things that have changed; Public companies must now have a totally separate audit committee composed of entirely independent directors and must contain one financial expert. Security fraud now has much more extreme punishments for those who commit or conspire to commit fraud. Since the introduction of SOX auditors of public companies must keep documentation of an audit for seven years, destruction of any documentation or evidence that someone has committed fraud is now punishable by jail time and fine. SOX also affected many attorneys; if an…show more content…
I feel that one major reason that SOX was controversial is that it cause many companies, that were following the rules and regulations, to go out of their way and change policy and procedure and potentially costing them more money. Overall I think that the SOX act was a needed to help protect millions of investors, and to shed some light on what is actually taking place within a company financially. SOX may have not been an ideal situation for many companies but the act is well in favor for the

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