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This addresses questions related to the Sarbanes-Oxley Act.

I need some help with answering the following questions concerning the Sarbanes-Oxley Act. Thank you.

When the Sarbanes-Oxley Act passed, it was in the wake of various corporate scandals that hit the business world and challenged the fiscal accountability of public corporations.

(1) Describe the main intentions and objectives of the SOX Act, citing and documenting your sources in your reference list.

(2) The anticipated impacts and the complexity of the requirements of the Sarbanes-Oxley Act were unknown at that time. How successful do you think Sarbanes-Oxley has been in meeting its objectives?

(3) Where do you think it has fallen short?

(4) Has there been any unintended impact from this legislation? Please identify and explain specific examples.

Solution Preview

Discussion for each of your study questions --

1. The SOX Act was created as a reaction to the accounting scandals that took place in the early 2000s, like Enron and WorldCom. When a company as big as Enron collapses, it actually has the ability to shake the economy, which is what happened. People lost jobs, investors lost their life savings in many cases, people that had worked hard for years lost their retirement accounts. This made a tremendously grave impact on the accounting profession and on the economy. There is a great reference to the various sections of the act located here:

www.soxlaw.com

This is a very comprehensive, user-friendly site that describes the regulations required for each section. Essentially, the SOX Act focuses on establishing proper corporate governance, internal controls, and full disclosure principles. These elements work together to ...

Solution Summary

This solution addresses four questions related to the Sarbanes-Oxley Act, which are:

When the Sarbanes-Oxley Act passed, it was in the wake of various corporate scandals that hit the business world and challenged the fiscal accountability of public corporations.

(1) Describe the main intentions and objectives of the SOX Act, citing and documenting your sources in your reference list.

(2) The anticipated impacts and the complexity of the requirements of the Sarbanes-Oxley Act were unknown at that time. How successful do you think Sarbanes-Oxley has been in meeting its objectives?

(3) Where do you think it has fallen short?

(4) Has there been any unintended impact from this legislation? Please identify and explain specific examples.

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