Sarbanes–Oxley Act 2002

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Introduction The intention of Sarbanes–Oxley Act (2002) was to avoid probable scandals and restore shareholders’ assurance. It was enacted as a response to many corporate and accounting frauds like Enron, WorldCom and Tyco International. Role of Sarbanes-Oxley in corporate accounting and reporting: One key section of the act conditions for use of non-US GAAP or proforma financial information and internal control over financial reporting. Companies registered in the US should disclose financial reports in accordance with GAAP with a reconciliation of the differences between this and the non-GAAP measure. Internal controls over accounts reporting include procedures that concern to the safeguarding of records that correctly and fairly reveal the transactions and dispositions of the assets of the issuer. It also needs to give realistic assurance that receipts and expenditures of the issuer are only made in accordance with authorizations of management and directors of the registrant. What implications does this act have for those who are unethical with accounting information? Corporate fraud and accountability section deals with the penalties and regulations to avoid fraudulent practices. One key result of this applies to anyone who tries to meddle with documents. Such persons would be subject to a fine or imprisoned for 20 years. Similarly, this act adds substantial fines and longer prison time for corporate employees who sign-off on the correctness of their financial statements, which knowingly misstated. This act has gone ahead to impose criminal liability on the CXO executives for the failure to file certifications in accordance with the legislative period schedule. What impact does the act have on the corporate accountant, on creditors of a company, on investors in a company, and on customers of a company? Corporate Accountant had to present the most

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