Question

In 2002, Congress passed the __- Act in an effort to address some serious problems of corporate governance.

a. Sarbanes-Oxley
b. Dodd-Frank
c. Gramm-Leach-Bliley
d. Patriot

Answer 1

The Sarbanes-Oxley Act was passed in 2002 to protect investors by increasing transparency and accountability in corporate governance and financial reporting, following severe accounting scandals.

Step-by-step explanation:

In 2002, Congress passed the Sarbanes-Oxley Act in an effort to address some serious problems of corporate governance. After major accounting scandals involving prominent corporations such as Enron, Tyco International, and WorldCom shook the public’s confidence, this piece of legislation was designed to protect investors from accounting fraud by increasing confidence in the financial information provided by public corporations. The Act imposed new standards for all U.S. public company boards, management, and public accounting firms, setting new accountability standards for corporate governance and financial reporting.