Sarbanes-Oxley Act

Business and Marketing
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Provisions of Sarbanes-Oxley Act
The Congress passed the Sarbanes-Oxley Act in July 2002 to respond to the numerous accounting scandals in the corporate. The Act had the aim of reinforcing accountability in corporate and professional responsibility to restore the confidence of investors in the corporate America. The Act was to boost the quality of the financial reports, promote the effectiveness of the audit reports and to create an oversight board in the public accounts to regulate the auditing profession. The concern of investors about the rampant cases of scandals and the consequent loss of confidence were the primary reasons for the slump in the stock market in the year 2002 (Pankaj, 2002).
The first provision of the Sarbanes-Oxley Act was the establishment of the oversight board for the public accounts. The second was to mandate the rotation of the audit partners and the five years periodical review of the audit partners. The third provision was to prohibit audit firms that provide audit services for firms that issue by performing non-aud...