Answer:
The U.S. law that was passed to deal with accounting scandals that occurred in the early 2000s is the Sarbanes-Oxley Act of 2002 (SOX). The legislation was enacted in response to high-profile accounting scandals, such as Enron and WorldCom. These events shook investor confidence and highlighted weaknesses in corporate governance and financial reporting practices.
The Sarbanes-Oxley Act introduced significant reforms to improve corporate accountability, enhance transparency, and strengthen financial reporting standards. It established new requirements for corporate governance, internal controls, and the independence of auditors. It also created the Public Company Accounting Oversight Board (PCAOB) to oversee and regulate the auditing profession.
SOX introduced stringent financial reporting and disclosure obligations for public companies and increased penalties for fraudulent activities. It also provided protections for whistleblowers who report misconduct. The law aimed to restore investor confidence in the reliability and accuracy of financial information. Ultimately, it would prevent future accounting scandals by promoting greater accountability and transparency in corporate practices.
Step-by-step explanation: