The Sarbanes-Oxley Act of 2002 (SOX) was passed as the result of the Enron scand

Question

The Sarbanes-Oxley Act of 2002 (SOX) was passed as the result of the Enron scandal and other instances of accounting fraud. This act was passed to strengthen the role of the Securities and Exchange Commission (SEC). Research a case of corporate financial abuse related to the Sarbanes-Oxley Act of 2002 and apply this to your current work or desired place of employment. Create a 1,400-word analysis of the application of SOX in which you include the following: •Discuss the mistakes made by the company and their leadership. •Discuss the steps leadership could have taken to prevent or mitigate the repercussions. •Explain the role of market pressures on unethical behavior. •Examine the influence of the basics of finance and how the Sarbanes-Oxley Act of 2002 changed things. •Evaluate the influence of Sarbanes-Oxley Act on ethical behavior. Are businesses more ethical since the enactment? •Explain the changes companies needed to make in how they use and present financial statements. •Discuss how SOX has affected your current place of employment if at all, and if not, how it has affected others in the same industry. (200) each header Cite a minimum of 2 scholarly sources. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.

Explanation / Answer

Ans: Sarbanes-Oxley Act of 2002 also known as " Public Company Accounting Reform and Investors Protection Act" that come in force in July 2002 and it bring alot of major changes in regulation of corporate governance and financial practice. Its name was introduced by the name of Mr. Senator Paul Sarbones and Representative Michael Oxley. It gives alot of non negotiable deadlines to few complance.

The bill was enacted to to reach on many major corporate and accounting scandals including Enron and Worldcom. The Bill contain 11 sections which cover the responsibility of a public corporations board of directors, attached criminal as well as civil penalities for few misconducts and required the Security Exchange commission to creat and made regulations which the public corporations are suppose to be comply. It bring few sections which brings changes and deadlines Such as:

Section 302 :It Mandate that a senior manager is required to certify the accuracy of the reported Financial Statement. The report should be true and fair and should not contain any material untrue statements/ ommissions.Financial statement should be fairly presented the Financial condition.If there is any deficiency in internal control then a list of deficiency in internal control and the employee involve in fraud should be mention.

Section 401:Financial statement which is to be presented should be accurate and presented in a manner that does not contain incorrect statements or admit to state material information. These financial statements shall also include all material off-balance sheet liabilities, obligations or transactions.

Section 404:It stated the effectiveness of Internal control system within the organisation.

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