Evaluate The Sarbanes-Oxley Act

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Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors and make one (1) suggestion for improvement. The Sarbanes-Oxley Act is been very effective especially by protecting investors and improving the accuracy and reliability of corporate disclosures, and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies, prevent insider trading and deals, requiring companies to adopt strict internal controls, and increasing the penalties for white collar crimes relating to investor fraud. As a matter of fact, the Act effects dramatic change across the corporate area to re-established investor confidence in the integrity…show more content…
The PCAOB has issued a report describing the kinds of audit deficiencies as identified on audits affected by the financial crisis. The PCAOB also issued several practice alerts on various auditing risks during the course of the crisis. Besides, the PCAOB is focused on taking appropriate steps in its inspection and enforcement programs in order to improve audit quality and enhance protection of the investing public. The PCAOB is also using information gained in inspections and investigations, along with information received from investors, audit committee members, auditors and others, to improve auditing and related professional practice standards to improve the quality of audits during periods of economic…show more content…
It has been observed many well-intentioned efforts to improve audit committee performance; many audit committees viewed those best practices as good ideas for someone else. The force of law through Sarbanes-Oxley has made it different this time. The number of meetings is up by 50 percent. The duration of the meetings has also increased by 50 percent, fundamentally doubling the amount of time that audit committees are spending in overseeing the financial reporting process. Members are better informed. They are better prepared and they better understand their essential role. They ask focused, probing questions. Prior to the act, the audit committee chairman would rarely call the lead audit partner in between meetings or in preparation for an upcoming meeting. Since the act over the past 2 years, this has become a very common practice. Auditors are also stepping up. They have embraced both the letter and the spirit of this new law. I believe anytime you assess the impact of a change as sweeping as Sarbanes-Oxley, it is as important to consider the direction you are moving, as well as assess where you are. The risk of fraudulent financial reporting has been reduced by the actions taken to implement the act by management, by audit committees, by the PCAOB, by auditors. I believe it is time to absorb this massive change represented by Sarbanes-Oxley. Let's sustain our commitment to restore investor confidence and

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