The needs and implications of the Sarbanes-Oxley Act of 2002

The needs and implications of the SARBANES-OXLEY ACT OF 2002 GENERAL BACKGROUND The Enrons and Worldcoms made it cook that the fiscal markets cannot be left under the tutelage of integrate directors and officers, without oversight authority. The corporate abuses and fraud that Enron exemplified, while not a eldest in the financial markets, they were certainly a first in impairment of the magnitude of the losses to stockholders and the confidence the domain reposed in the financial sector (Bequai 2003). The allegation against Enron was that it used fussy purpose vehicles for $8.5 one million million million of deals to cover up real level of debt (Student Accountant 2002, p.9). WorldCom was alleged to shake case-hardened over £3.8 trillion revenue costs - internet maintenance - as capital expenditure to inflate gelt. Also, Loans of $2.5 billion were misreported (Student Accountant 2002, p.9). Both companies came under criminal investigation, went ba nkrupt - WorldCom existence the biggest ever bankruptcy - and the auditor for both companies (Anderson) was convicted for obstruction of justice. The Sarbanes Oxley mathematical function of 2002 was instigated as a direct result of the Enron, WorldCom and other accountancy scandals in the US. It does not affect UK companies unless they are subsidiaries of US firms or are listed on US stock exchanges.

The act combines bills originally drafted by US senator Paul Sarbanes and Congressman Michael Oxley. It is de sign to pull through corporate accountability through new requirements, backed by stiff penalties. Under the Act, Chief Executive Officers (CEO! s) and Chief financial Officers (CFOs) must personally certify the accuracy of financial statements, with a maximum penalty of 20 years in carry back and a $5m fine for false statements (It Week 2003) death chair George W. Bush signed the Act on 30 July 2002 (the decree Date). This landmark rule and the resulting regulations, will... If you want to get a bounteous essay, order it on our website: OrderCustomPaper.com

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