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) state an opinion as to whether the writer of this work believes that the accounting profession is better off being self or government regulated with regard to a firm's ability to detect and report corporate fraud. Support for your position; and finally to (4) Predict whether or not corporate fraud will be reduced, increase, or remain the same based on requirements for audits of publicly traded companies as prescribed in the Sarbanes-Oxley Act.
Overview of the Sarbanes-Oxley Act
The legislation to the Sarbanes-Oxley Act came into being in 2002 and is reported to have introduced "major changes to the regulation of financial practice and corporate governance." (Sarbanes-Oxley Act, 2002, p.1) The Act was named after Senator Paul Sarbanes and Representative Mike Oxley who designed the legislation and set compliance deadlines for the Act. There are eleven titles included in the Sarbanes-Oxley Act. The Sarbanes-Oxley Act additionally established the public accounting board.
II. Sarbanes-Oxley Compliance
Section 401
Section 401 of the Sarbanes-Oxley Act sets out requirements that financial statements that are published by issuers be required to not only be accurate in nature but also to be presented "…in a manner that does not contain incorrect statements or admit to state material information." (Sox-Law, 2003, p.1) Requirements are stated for inclusion of: (1) all material off-balance sheet liabilities, and (2) obligations or transactions. (Sox-Law, 2003, p.1) In addition, the Commission is required to make the determination of whether "generally accepted accounting principles or…
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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
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