What is the Sarbanes-Oxley Act?
The Sarbanes-Oxley Act of 2002 is a United States state litigation passed in vim to the pullulating leading corporate and accounting scandals including those at Enron, Tyco International, and WorldCom (now MCI). These scandals resulted in a repel of self-evident trust in accounting and reporting practices. Named after sponsors Senator Paul Sarbanes (D-Md.) and Representative Michael G. Oxley (R-Oh.), the Act was approved by the House by a vote of 423-3 and by the Senate 99-0. The legislation is wide-ranging and establishes new or enhanced standards for all U.S. public company Boards, Management, and public accounting firms. The first and most important part of the Act establishes a new quasi-public agency, the Public Company Accounting Oversight Board, which is charged with overseeing and disciplining accounting firms in their roles as auditors of public companies. Some of the major provisions of the Sarbanes-Oxley Act’s include:
–Certification of money reports by bad important officers and optimum fiscal officers
–Auditor independence, including full-dress bans on clean-cut types of working for reflection clients and pre-certification by the company’s Audit Committee of all contrary non-audit vitality
–A itch that companies listed on universal exchanges have fully out procession committees that govern the relationship between the company and its auditor
–Significantly longer consummate jail sentences and more appropriate fines for corporate executives who knowingly and willfully misstate financial statements, although maximum sentences are surpassingly simple as judges generally follow the Federal Sentencing Guidelines in setting actual sentences
–Employee protections allowing those corporate fake whistleblowers who order complaints with OSHA within 90 days, to effect reinstatement, bear skin and benefits, compensatory damages, abatement orders, and loose advocate fees and costs.
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