SOX Regulations. Accounting, Finance, SPSS Assignment

SOX Regulations
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SOX REGULATIONS
The Sarbanes-Oxley Act of 2002 is also referred to as SOX regulation. This is a federal law that was enforced in 2002. This law aims at establishing auditing and financial regulations for public corporations. The main aim of the lawmakers was to protect the employees, shareholders, and consumers from accounting mistakes and fraud in accounting. This law also aims at improving the accounting practices of public corporations, especially when preparing the books of account. The Act makes a company more reliable when it comes to documentation. Through this Act, investors are protected from the fraudulent activities of a company. This paper will analyze different sections of the SOX Act of 2002 and some of the implications this law has on auditors and public companies.
Question 1
Assess the sections of SOX, indicating the sections that you believe have the most impact on companies. Provide support for your rationale.
There are there main provisions of the Sarbanes-Oxley Act of 2002. These sections include Section 802, Section 404, and Section 302. These sections ensure that accountants who can forge financial statements are imprisoned. There are four principle areas of the Sarbanes-Oxley Act of 2002. These areas include new protections, accounting regulation, corporate responsibility, and increased criminal punishment. Section 302 of this law gives senior corporate officers the authority to certify the financial statements of a company (Andrade, Bernile, & Hood III, 2014). These statements are supposed to comply with the SEC disclosure requirements. According to this section, any officer who will sign inaccurate financial statements will face criminal penalties including prison terms. The CFO should review all the financial reports. Further, financial reports are not supposed to have any mistakes or misinterpretations. Additionally, internal auditors are supposed to manage the internal accounting controls of a company and also indicate any adjustment in the internal accounting controls.
Section 404 ensures auditors and the management of a company can establish reporting and internal control techniques to ensure the controls are sufficient. However, there are some critics about this section whereby people believe that this section can affect a company negatively since it will force an organization to incur a lot of expenses. Additionally, it is very difficult to maintain the internal controls of the company. On the other hand, section 802 of this Act has three rules that have a lot of impact on recordkeeping of a company. The first rule deals with the falsification of records, the second rule deals with the retention period of the records, and the third rule deals with companies that require to store like electronic communications. Section 802 is the most important section of the Sarbanes-Oxley Act of 2002. This is because this law has promoted a lot of transparency in the open market. Additionally, this section is very important to stakeholders because it ensures there is proper recordkeeping in the organization. This section also ensures data is well kept for a long period without any interference. This section is also implemented...