Answer:
The Sarbanes-Oxley Act of 2002 was designed to protect investors and shareholders from accounting frauds, misguided financial statements and intentional errors by improving accuracy and reliability of company's accounts. This act was created in response to financial scandals and frauds that took place before 2002. Public corporations are required to comply with the Laws and regulations in the Sarbanes-Oxley Act.
Step-by-step explanation:
The Enron scandal was the base for the Sarbanes Oxley Act. It was created to avoid further potential frauds in the businesses. Auditors at Enron were responsible for ensuring accuracy of financial statements. Anderson deceived many investors who relied on companies financial statements. Anderson certified financial statements of the company without questioning them about the relevancy and accuracy. Anderson was found guilty of obstructing justice by destroying Enron's related auditing documents. Attorneys helped to mold some of company's special purpose partnership. These deals lead to demise of the company. Merrill Lynch replaced research analyst after his coverage of the Enron company which dissatisfied the company executives. Merrill Lynch was subject to threats by Enron that it would loose $750 million from stock offerings.