Provide an overview of the Sarbanes-Oxley Act of 2002.
In reference to the article, how did Enron fail to follow their own code of ethics?
Do you believe that the Sarbanes-Oxley Act of 2002 has helped to prevent securities fraud
why or why not?
How did the Enron case impact corporate America?
What do you believe is the most important section within the enactment to prevent securities
fraud? Please explain
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The Sarbanes-Oxley Act of 2002 or the Sox in short, was created in response to the accounting scandals that happened in the early 2000s, e.g., Tyco, Enron, WorldCom. The series of financial fraud shook the business world and caused investors to lose confidence in financial statements. As a result, it was obvious that there was a need to overhaul accounting regulatory standards and the SOX was passed by the US Congress in 2002.
The SOX mandated various reforms in the financial disclosures aimed to be strictly implemented to ensure an improvement in the financial disclosures from corporations. With this regulation, senior managers are required to certify the credibility of the reported financial statements of their corporation. In addition, they are mandated to establish internal controls as well as reporting methods that prove the sufficiency of those controls.
According to the Journal of Leadership Education (Vol. 2, Issue 1 - Summer 2003), Enron's problem was rooted in its management. There was moral failure and abuse of power from its top management. Their top management ventured in dubious limited partnerships they called the Special Purpose Entities (SPEs) and these were illegally run by the company's people and backed by the Enron stocks. Although the ...
* Overview of the Sarbanes-Oxley Act of 2002.
* How Enron failed to follow its code of ethics and the reasons why it collapsed.
* Opinion of the Sarbanes-Oxley Act's effectiveness in preventing fraud.
* How Enron's case has made an impact on corporate America.
* The most important and controversial section of the Sarbanes-Oxley act.
* 807 words
* six URL links for references