This review was seen to be important as it would enable the Securities and Exchange Commission (SEC) to temporarily freeze any transactions or payments that were deemed to be unusual for the company (Kuschnik, 2008).
In general, the act deals with ensuring the financial reports generated by auditors and finance managers within organization to develop internal control reports that can be used to determine the accuracy of the company’s financial data.
They instead preferred to perform a single internal control testing exercise which would enable them to identify and document any financial issues or problems (Bednanrz, 2006). This essay on Sarbanes-Oxley Act was written and submitted by user Kolton Sharp to help you with your own studies.
You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
For example auditor independence which falls under the second title deals with limiting the conflicts of interest that arise during audit reporting while corporate fraud accountability which falls under the eleventh title of the act deals with the identification of corporate fraud and the various penalties that are served to deal with fraud.
This section also revises the sentencing guidelines that were in existence before to deal with people who defrauded companies of billions of dollars.
They both passed two different bills that pertain to the same problem which had to do with corporation's auditing accountability and financial fraud problems within corporations. 2673) brought by Senator Sarbanes and the other bill (H. Furthermore, according to an online guide to the Sarbanes-Oxley Act the major compliances to the act rest on 5 sections: The first one is the Sarbanes-Oxley section 302, which is found under Title III of the act, pertaining ' Corporate Responsibility for Financial Reports'.
With regards to the benefits of the act, various financial analysts and experts noted that the borrowing costs were lower for companies that had improved their internal control measures while corporate transparency had improved within many publicly traded organizations during the first year of compliance.
Section 404 of the act ensured that companies had conservative reported earnings where financial reports and statements underwent verification to determine their accuracy before being presented to the various stakeholders of the company.