Search:

The History of the Act

After the fall of the mighty empires of Arthur Anderson, WorldCom and Enron a postmortem of the events revealed total whitewash of financial information by fraud committed by the executive of the company on the investing public.

On July 30th of the year 2002, Senator Paul Sarbanes and representative Michael Oxley drafted a new bill and introduced it before the Senate which after passing became the law called Sarbanes-Oxley Act . The basic objective with which the bill had been prepared and drafted by these two gentleman was to protect innocent public who invest their hard earned money in public companies on basis of their past performances as reflected in their publicly available financial documents. Any misrepresentation, fraud, willful or otherwise is going to mislead the public and ultimately become another Enron or WorldCom. This needs to be prevented by the use of proper regulatory framework of reporting guidelines to be enforced by law so there is no escape. The Sarbanes-Oxley Act strengthened the fragile securities law which had the reporting guidelines which were never made mandatory. The Sarbanes-Oxley Act is a lay to be followed by all and every single organization whether it is big or small. The law is mandatory.

In most of the companies prior to the Sarbanes-Oxley Act the board of directors were a rubber stamp in the hands of CEO or the chairman of the company and were merely reduced to ‘yes’ men. Due to the fat salaries all executive who had spent conservable time in the company had the desire to be a member of the board of directors for the money and prestige it carried. Sarbanes-Oxley Act has now changed the outlook of these executives. It is no more lucrative enough to become a board member. The Sarbanes-Oxley Act has taken away all the flexibility that the board of the companies had and has now prescribed sufficient guidelines within which the board is supposed to Act.

Article Source: http://www.e-learnet.org

William Turner also writes for System Disc on topics such as Digital Photography Training and What is PCMCIA Visit The History of the Act.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Business Articles Via RSS!

Additional Articles From - Home | Business

The Mysteries created by 12 Web Millionaires Revealed - By : Sandie Clickbrahm
Topmost Tips On How To Earn Easy Money Online - By : Alex Mall
The System That Makes At Least $171,168.06 per Month. - By : Ion Murray
Discover How You Can Create Advertising That Sells... - By : Alex Mall
China Manufacturers Trade Database - By : Alex De Mostafa
The Future Looks Bright - By : Alex De Mostafa
Why You Should Use A Tax Consultant - By : Alex De Mostafa
Valentine promotional items - By : Alex De Mostafa
Making Money Online: The Top Three Methods - By : Susanne Butler
Ceiling Fan Varieties - By : Lillie Smith

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Article Coder
Article Comet
Article Forever
Article Purse
Article Scrolls
Ad Blog Advertising
Antiquerra
Arbloggedon
Bajande Blog
Bersonda Blog