Question

EA7.

LO 1.4After the passage of the Sarbanes-Oxley Act in 2002, many new responsibilities were put into place for organizations and their management. What are the four significant issues that were addressed by the act and its provisions as presented in this chapter? How does the act and its various requirements help deter fraudulent activity?

Answer 1

Answers and explanation:

A) The 2002 U.S. Sarbanes-Oxley Act (SOX) is a legislative response to several corporate scandals that shift the balance of power across the financial markets around the world. There are four (4) issues pointed out by the SOX that needed to be addressed: corporate responsibility, criminal punishment, accounting regulation, and new protections.

B) The SOX aims to increase organizational transparency and strengthen corporate internal control. With this act, stricter rules were introduced with more rigorous record-keeping standards for certified public accountants, auditors, and senior executive officers.