Thousands of employees left as the stock market went to the peak but most of them left their jobs due to low pay as well. (Kerry Hannon, July 6, 2005) bill was passed by the President Bush after the corporate fraud nearly just after three weeks on April 25, 2002. It referred to the Senate Banking Committee which was clearly supported by the president and SEC. The bill was passed for the corporate fraud, regulatory board with investigative, enforcement powers to check out the accounting company, securities and laws for accounting and also to punish the corrupt auditors. However, more than 200 federal prosecutors were involved in this fraud. At the same time, the chairman of the committee, Senator Paul Sarbanes also prepared a bill which was passed on June 18, 2002 to the Senate Banking Committee. After few days, WorldCom accepted that it had overstated it by more than $7.2 billion during the past 15 months because of wrong calculations in accounting for its operating costs. On the following day, the Senator introduced the Senate Bill 2673 as well. A conference was held in the White House where the Senate formed a conference committee. When the bill got approved by the committee members they named it "The Sarbanes-Oxley Act of 2002." (Elisabeth Bumiller, July 31, 2002). Section 404 was enacted in 2002, after the corporate accounting scandals to protect the investors. On November 2004, U.S. companies working on larger scale took effect with the financial matters that ended up, applies with the public company with more than 300 U.S. shareholders for presenting annual reports with the SEC. Although, SEC gave the same process to increase the scale of smaller U.S. companies and also to non-U.S. chosen company. The requirements of section 404 led a debate on if the company's costs of compliance are prohibited. Almost five hundred companies have reported short listed under the new law. A file report is required under the section 404 of Sarbanes-Oxley containing the following, a statement on the company's internal controls on the management of the company from an accounting firm that audited the company's finance statement, keeping the secret to any of the weakness of the internal controls in the company, a statement to recognize the framework to examine the company's internal control, a statement about the responsibilities of the management for the internal control over financial reports and a test by the management to check out the company's internal control whether the controls are effective or not. This report should be confirmed by the auditor for the effectiveness of the company's internal control including the maintenance of the company as well. The Sarbanes-Oxley Act only effects on non-U.S. companies who are cross listed in U.S. And also on the firms which belongs to less developed countries. However, as the halt of section 404 has not stopped the smaller companies which are non-U.S. companies from moving to delist although many of the companies are questioning about whether the new reporting will make the adjustment with law being very expensive and consuming a lot of time to maintain the U.S. market flow. Non-U.S. companies with large capital with huge financing needs will probably find that section 404 which is indeed a worthwhile but on the other hand, companies with smaller floats and less need to increase the capital in the markets may find section 404 as benefit to remain on the list. Companies who focus on the internal controls help them to be aware about the investors who are willing to start in private financings with some of the government control for their standard with the public company to apply the Sarbanes-Oxley. Many of the investors are seeing this as a benefit or assuring their funds participants that they are investing on the right place. Non-U.S. companies who are willing to raise their capital may not escape the Sarbanes-Oxley standards as some of the requirements will be insisted by the contract when the financing is provided by an investor including some other laws. It has became clear for the companies who are in the United States or are non-U.S. companies that if the investors are in small quantity than it will lead them to a lower stock market valuation (White & Case, April 6, 2005). Sarbanes-Oxley Act has affected the small companies comparatively to large or medium size companies. It is confirmed by the SEC as it is very hard to apply SOX, small...
Sarbanes-Oxley Act (SOA) was put into law in 2002 following the revelations that Enron (and Enron's accountancy Arthur Anderson), WorldCom, and other corporations were using blatantly corrupt practices in accounting and causing huge losses for stakeholders in those firms. Moreover, the U.S. Congress could not simply stand by and allow companies to use unethical and illegal practices to scam huge sums of money for corporate executives while stripping the IRAs
Sarbanes-Oxley Act The objective of this study is to read the guide to the Sarbanes-Oxley Act and to: (1) Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors make one suggestion for improvement; (2) Given the oversight of the accounting profession by the PCAOB as a result of the Sarbanes-Oxley Act, assess the impact on auditing firms and the public accounting professions; (3)
Sarbanes-Oxley Act Evaluating the effectiveness of the Sarbanes-Oxley Act The Public Company Accounting Reform (PCAR) and Investor Protection Act (IPA) was established in mid-2002 by the congress with the emergence of unceremonious scandals in accounting practice that resulted in firms going bankrupt and losing huge stocks in the stock market (Prentice & Bredeson, 2010). This act is what is referred to as Sarbanes-Oxley act of 2002. The act also led to the
Sarbanes-Oxley Act of 2002 The accounting profession was entangled in the accounting and business scandals whirlwind that rocked the American economy in 2002. To recover investor confidence in financial data, the Sarbanes-Oxley Act designed a new Oversight Board for public Company accounting with the power to set requirements for auditors of public organizations, thus bringing to an end a century of export control of audit. We determine that this reform results
Literature on the Sarbanes-Oxley Act of 2002 The field of specialized literary reviews on the Sarbanes-Oxley Act is a widely spread one presenting numerous issues form various standpoints. Reviewers' opinions vary based on their position towards the bill and their prior professional expertise on white-collar crimes. Among the mostly appreciated and close to reality works are: The Impact of Regulatory Information Disclosure on Information Security Investments, Competition and Social Welfare by
The integrity of the financial sector of these organizations controlled by state agencies and related services, would improve. The provisions offered by the act would serve as models based on which standards for other non-profit organizations can be developed in the future. It will create a better understanding of the limitations placed on auditors and a deeper scrutiny of the financial and transaction statements presented by the auditors. While
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