Sarbanes-Oxley Legislation and Implementation. Business Essay

Sarbanes-Oxley Legislation and Implementation
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Sarbanes-Oxley Legislation and Implementation
The Sarbanes- Oxley Act is a law that was passed on 30th July 2002 in the United States to protect investors from cooked financial reports by organizations. This law is also known as the SOX Act of 2002. The law provided modification to security regulations that existed at the time and imposed strict punishment on those who could break the law. The following are the requirements of the law.
Financial Statements
All financial statements were required to comply with the Security and Exchange Commission (SEC) requirements. Senior corporate officials were given the mandate to certify in writing that the statements had fully adhered to the law. Any officer who could sign off on financial statements that were considered inaccurate was convicted or either faces other criminal charges.
Internal Controls
The SOX Act of 2002 required internal control from the management and auditors. Efficient reporting systems that ensured adequacy of those internal controls were also established. However, the law has critics who have argued that it is costly...