Final answer:
The Sarbanes-Oxley Act requires CEOs and CFOs to certify the accuracy of their company's financial statements, holding them accountable for the information provided. It was enacted in response to major accounting scandals to increase accountability and transparency in corporate financial reporting.
Step-by-step explanation:
The Sarbanes-Oxley Act, passed by Congress in 2002, requires CEOs and CFOs to certify that the firm's financial statements are accurate and complete. This certification is known as the CEO/CFO certification, and it holds these executives accountable for the accuracy of the financial information provided by their company.
The Sarbanes-Oxley Act was enacted in response to major accounting scandals involving companies such as Enron, Tyco International, and WorldCom. These scandals revealed widespread accounting fraud and the need for increased accountability and transparency in corporate financial reporting.
By requiring CEOs and CFOs to certify the accuracy of their company's financial statements, the Sarbanes-Oxley Act aims to prevent fraudulent financial reporting and protect investors from misleading information.