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The Sarbanes-Oxley Act - impact on financial management in healthcare
The Sarbanes-Oxley Act, named after Senator Sarbanes and Representative Michael Oxley, was enforced in 2002 in response to significant acts of fraudulence at Enron Corp and other organizations (Plette 2008). The Act is also known as the Public Company Accounting Reform and Investors Protection Act with the specific aim to protect investors by regulating financial management in order to achieve a more stringent accountability amongst organizations (Plette 2008). As such the Act introduced significant changes to the regulation of financial practice and corporate governance. While compliance to the Act is mandatory for all public organizations large or small whose interests are monitored by the Securities and Exchange Commission (soxlaw.com 2006, Carroll 2009), the Act nonetheless has had an impact on non-profit hospitals and healthcare organizations which are not directly bound by the Act. The Act has influenced, albeit indirectly, the financial management of health care organizations, particularly in the area of governance and accountability. Some organizations have gone as far as establishing independent auditing committees in an effort to be consistent with the Act (Turcotte, 2004).
It is advised, generally, that health care organizations strive for their ...
The Sarbanes-Oxley Act is clearly articulated.