The Sarbanes Oxley Act was put in place to reduce scandals similar to
the Enron scandal. The main goal of this act is to prevent a firms
management from interfering with a financial audit. "The Sarbanes-
Oxley Act (SOX) is a federal act passed in 2002 with bipartisan
congressional support to improve auditing and public disclosure in
response to several accounting scandals in the early-2000s. The act
was named after the bill sponsors, Senator Paul Sarbanes and
Representative Michael Oxley, and is also commonly referred to as
SOX. "
SOX 404 is a section that explains requirements to implement
internal controls.
Impact on auditors:
"The act implemented new rules for corporations, such as setting new
auditor standards to reduce conflicts of interest and transferring
responsibility for the complete and accurate handling of financial
reports. To deter fraud and misappropriation of corporate assets, the
act imposes harsher penalties for violators."
I agree with the author in regards to the impact of auditors. SOX
changed the auditing field forever.
Blokhin, A. (2022, July 13).
The impact of the Sarbanes-Oxley Act of
2002
. Investopedia. Retrieved July 3
1, 2022, from
https://www.investopedia.com/ask/answers/052815/what-impact-
did-sarbanesoxley-act-have-corporate-governance-united-states.asp
Legal Information Institute. (n.d.).
Sarbanes-Oxley act
. Legal
Information Institute. Retrieved July 31, 2022, from
https://www.law.cornell.edu/wex/sarbanes-oxley_act
