This website uses cookies to ensure you have the best experience. Learn more

Corporate Responsibilities Of Sarbanes Oxley Act Of 2002

4874 words - 20 pages

Patrick Chamberlain
Dr. Wokukwu
Intermediate Accounting
October 13, 2011

Corporate Responsibility of Sarbanes Oxley Act of 2002

To first understand the corporate responsibilities of the Sarbanes Oxley Act of 2002, otherwise referred to as SOX; you first need to understand that the Act was created for. The SOX came into effect in July 2002 and it was introduced for major changes to the regulation of corporate governance and financial practice. The act was also known as the ‘Public Company Accounting Reform and investor Protection Act of 2002’ in the senate and was called ‘Corporate and Auditing Accountability and Responsibility Act’ in the house. SOX set new and enhanced ...view middle of the document...

Roosevelt.” [6] The debate still continues over what the perceived benefits and cost of the SOX should be but opponents of the bill claim that it has reduced America’s international competitive edge against Foreign Service providers. The act introduced an overly complex regulatory environment into the United States financial markets. They say that SOX has been a godsend for improving the confidence of fund managers and other investors with regard to the truth of corporate financial statements. [6]

The Sarbanes Oxley Act of 2002 contains 11 titles that describe specific requirements for financial reporting. The first requirement is the Public Company Accounting Oversight Board (PCAOB) which consists of nine sections and establishes the PCAOB to give independent oversight of the public accounting firms providing audit services. [6] The title also consists of a central oversight board equipped with registering auditors, defining the specific processes and procedures for compliance audits, enforcing compliance with the specific mandates of SOX, and inspecting and policing conduct and quality control. [6] The next title is the Auditor Independence which consists of nine sections for the standards of external auditor independence. It also addresses new auditor requirements for reporting and it also restricts auditing companies that provide non audit services to the same clients. The third title is Corporate Responsibility which consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. [6] It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It tallies specific forfeitures of benefits and civil penalties for non-compliance. [6] More on Corporate responsibility will be explained later on. The fourth title is the Enhanced Financial Disclosures and it also has nine sections. [7] It describes the enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for guaranteeing the accuracy of financial reports and disclosures, and commands both audits and reports on those controls. It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports. [6] The fifth title is Analyst Conflicts of Interest and only has one section which includes measures designed to help reinstate investor confidence in the reporting of securities analysts. It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest. [6] The sixth title is Commission Resources and Authority and consists of four sections and describes practices to restore investor confidence in...

Other assignments on Corporate Responsibilities Of Sarbanes-Oxley Act Of 2002

An Investigation Of Japanese Corporate Culture, Its Trends And Changes

2143 words - 9 pages An Investigation of Japanese Corporate Culture, Its Trends And Changes Japanese Business & Culture bus 258.1 Table of Contents1.0 Introduction 2.0 Procedure 3.0 Findings 3.1 Changing social culture. 3.2 Business Culture in Japan 3.3 Why change is needed 3.4 What is Japan and her corporations doing to develop and change 4.0 Conclusion 5.0 Bibliography Japanese Business & CultureAn investigation Japanese corporate culture, its

Fundamentals Of Corporate Finance By Berk, Ch 7

2746 words - 11 pages Berk/DeMarzo/Harford • Fundamentals of Corporate Finance, Second Edition Dividend Yield: 5% (1/20) Capital Gain: 10% (2/20) Evaluate: The cost of capital for Anle Corporation is 15% given the current stock price of $20 and the expected stock price of $22 after paying the dividend of $1 in one year. The cost of capital is then split between the dividend yield at 5% and the capital gains yield at 10%, which together creates the 15% cost of

A Study Of The Relationship Between Corporate Governance Structures And The Extent Of Voluntary Disclosure

7994 words - 32 pages effectively delineating the rights and responsibilities of each group of stakeholders in the company. Transparency is one major indicator of the standard of corporate governance in an economy. In 1993 and 1994, to improve transparency and accountability, the SEHK and the HKSA set up a Corporate Governance Working Group (CGWG) respectively prescribing a number of recommended practices (HKSA 1997). These practices included: separation of CEO and

Provide A Brief Overview Of The Juvenile Justice System In Ireland And Analyse Its Response To Young Offenders Making Reference To The Children Act 2001 In Your Answer

1224 words - 5 pages young offenders making reference to the Children Act 2001 in your answer. Responsible for driving and leading reform in the area of youth justice, and located in the Department of Children and Youth Affairs, is the executive office of Irish Youth Justice Service. The service is run by officials from the Department of Children and Youth Affairs and the Department of Justice and Equality, who’s Ministers, are both responsible for the Children Act


472 words - 2 pages acquired by Verizon. Bernard Ebbers was eventually indicted, convicted and sentenced to 25 years in prison. The scandal cost investors billions of dollars when the company collapsed. The creation and passing of the Sarbanes-Oxley Act helped regained public confidence in the nation’s securities markets. Sarbanes-Oxley contains 11 sections, ranging from creating of an oversight board to corporate board responsibilities and criminal penalties

Fi504 Course Project 2

376 words - 2 pages FI504 – Accounting and Finance Case Study #2 Evaluation of Internal Controls Attention Mr. President, The Sarbanes-Oxley Act of 2002 is a United States federal law which sets new or enhanced standards for all U.S. public companies. The reason that this Sarbanes-Oxley Act of 2002 bill was created was because of a number of major corporate and accounting scandals. When these scandals occurred they cost investors billions in losses

The Scrushy Way

1617 words - 7 pages -Oxley Legislation The problem to be investigated is how Sarbanes-Oxley legislation improved corporate governance and improved the accuracy and reliability of corporate disclosures. The Sarbanes-Oxley Act of 2002 (SOX), named after its primary sponsors in both the US House and Senate, was a bipartisan bill designed to restore investor confidence. The bill was sent by the legislature to the White House and signed by President George W. Bush

Effect Of Unethical Behavior

498 words - 2 pages undiscovered. Some unethical behavior on an individual level, would be insider trading, kickbacks fraud and, as seen far too many times, the manipulation of the financial markets. The Enron Corporation was the perfect example of this unethical behavior and its discovery led to the implementation of Sarbanes-Oxley Act of 2002. The company used systematic and planned accounting fraud to misrepresent the corporation’s financial standing and, as a


1287 words - 6 pages -Oxley Act. Justify your response. The Sarbanes-Oxley Act of 2002 (often shortened to SOX) is legislation passed by the U.S. Congress to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures. It is a check and balances process that companies should have in place to ensure accuracy and deceitful practices are not in place within a company

My Paper

452 words - 2 pages McDonald’s have 8 current and expected government policies and regulations, including taxes and regulations in place to address issues related to externalities. First, is the audit and non-audit Service Policy? The purpose and Applicability of Policy is under the Sarbanes-Oxley Act of 2002, the Audit Committee of the Board of Directors is responsible for the appointment, compensation and oversight of the work performed by the independent auditor

Accounting Timeline

1525 words - 7 pages Act 2002 The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. The Sarbanes-Oxley Act is arranged into eleven titles. As far as compliance is concerned, the most important sections within these are often considered to be 302, 401, 404, 409, 802 and 906. The Act also created the Public Company Accounting Oversight Board PCAOB. The bill was enacted after a number of

Similar Documents

Sarbanes Oxley Act Essay

313 words - 2 pages 2.4 Impact: Sarbanes Oxley Act has had many positive impacts on American businesses, but has also had its share of criticism. As a result of the implementation of the Sarbanes Oxley Act, firms now produce financial information that is more transparent and holds some form of accountability. One of the greatest benefits of the Sarbanes Oxley Act is that investors are more confident because they now have access to more accurate financial

The Roles And Responsibilities Of A Teacher

552 words - 3 pages The Roles and Responsibilities of the Teacher There are many roles and responsibilities of the teacher, these have somewhat changed from my experiences at school. Teachers would stand at the front of the classroom and deliver a lesson using only the blackboard and chalk. The teacher was considered the knowledge fountain. As I explore the various roles and responsibilities of the teacher I will show the

Act Of Revenge Essay

775 words - 4 pages The act Of revenge In Edgar Allan Poe's "A Cask of Amontillado" we learn of a man who seeks vengeance on an acquaintance, named Fortunato. "The thousand injuries of Fortunato I had borne as I best could, but when he ventured upon insult I vowed revenge." (14) The story starts by defining a grudge that Montresor holds against Fortunato, and then goes on to explain that Montresor seeks vengeance in an impunitistic way. He Leads Fortunato

Legality And Ethicality Of Corporate Governance

770 words - 4 pages Legality and Ethicality of Corporate Governance Corporate Governance is control mechanisms that keep management operating within the rules and regulations. Without corporate governance, management could start operating under their own guidelines which may or may not involve integrity, responsibility, or accountability. Publically traded companies are required to have some type of corporate governance in place since the scandals from Enron and