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Effectiveness of SOX

Need help on a term paper (APA format) describing aspects of the regulatory environment which will protect the public from fraud within corporations, specifically Sarbanes-Oxley (SOX) requirements. No more than 1300 words.

Evaluate whether SOX will be effective in avoiding future frauds.
Evaluate the effect of regulation on ethical behavior.
Demonstrate an understanding of the regulatory environment.

Please include citations and references.

Solution Preview

SOX has been very effective in avoiding future frauds, as evident by the significant decline in financial frauds and decline in restatement of financial statements. Securities related class action lawsuits have also significantly declined. Overall, the act has strengthened the internal control, corporate governance and audit of public companies which, in turn, has been very effective in avoiding financial frauds in organizations.

SOX has significantly improved investor confidence by enhance the reliability and accuracy of financial disclosures. It has addressed issues pertaining to conflict of interest in the accounting profession by putting restrictions on the functions and services provided by auditors to the companies that they are auditing. SOX has significantly enhanced accountability on the part of the top management by requiring them to certify financial statements. Audit firms have to report to independent audit committees as per this act. ...

Solution Summary

Discusses effectiveness of SOX in preventing financial frauds.

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