The Sarbanes-Oxley Act of 2002

History In July 2002, in the U.S., Sarbanes-Oxley, officially titled the Public phoner Accounting Reform and Investor Protection Act of 2002, commonly referred to as SOX was signed into law. It is named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (ROH). SOX is aimed at defend investors, and restoring investor confidence, by improving the accuracy and reliability of corporate disclosures. The venture covers issues such as establishing a public company business relationship oversight board, auditor independence, corporate responsibility and enhanced pecuniary disclosure.(R. Power, D. Forte, 2007) Benefits Because the SOX Act was designed to protect investors, compliance with the act give the bounce lead to shareholder confidence which can strengthen the medical prognosis for a company and increase its stock price. Companies auditing their businesses often convalesce ways to eliminate waste and increase efficiency both(prenominal) of these reduce cost and therefore extradite a look at effect on the bottom line. Furthermore, SOX provides investors with more accurate and in-depth tools for valuing a company which promotes legitimate growth of businesses and the economy.

Costs Compliance with SOX can be costly for companies to put in place and adhere to as a large amount of time and money must(prenominal) be spent on instituting documentation, oversight via segregation of duties and authorization, archiving and auditing to learn all policies are in place. The time and money take to understand the requirements and the measures needed to be in compliance. Also, Costs associated with SarbanesOxley have be­come a major disincentive to companies list on American stock exchanges to the point that London or another city could replace New York as the gentlemans gentlemans financial center. (Heritage.org, May 16th, 2007) References Power, Richard; Forte, Dario. (2005). The SarbanesOxley Act: Do We Need a Regulatory or Legislative Fix? Computer craft & Security, Volume 2005, issue 9... If you want to get a wax essay, order it on our website: Ordercustompaper.com

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