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Introduction To Options

SARBANES OXLEY ACT
Glenn D’Souza
Roll Number 30
E-MBA SEM III
SIES College of Management Studies
What is the Sarbanes Oxley Act?
The Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002 and introduced major changes to the regulation of financial practice and corporate governance. The legislation set new or enhanced standards for all U.S. public company boards, management and public accounting firms. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties.
What does Sarbanes Oxley Address?
• Sarbanes Oxley Act Establishes new standards for Corporate Boards and Audit Committees
• Sarbanes Oxley Act Establishes new accountability standards and criminal penalties for Corporate Management
• Sarbanes Oxley Act Establishes new independence standards for External Auditors
• Sarbanes Oxley Act Establishes a Public Company Accounting Oversight Board (PCAOB) under the Security and Exchange Commission (SEC) to oversee public accounting firms and issue accounting standards.
• Restore public confidence in the nations capital markets by strengthening corporate accounting controls.
• The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.
History of Sarbanes-Oxley Act
• A variety of complex factors created the conditions and culture in which a series of large corporate frauds occurred between 2000-2002. The spectacular, highly-publicized frauds at Enron WorldCom, and Tyco exposed significant problems with conflicts of interest and incentive compensation practices. The analysis of their complex and contentious root causes contributed to the passage of SOX in 2002.
• The Senate Banking Committee undertook a series of hearings on the problems in the...