Writers Choice – Coursework Example
The Sarbanes Oxley Act of 2002 . The Sarbanes Oxley Act of 2002 Main points in the Act The Sarbanes Oxley Act of 2002 was formulated after major corporate and accounting scandals such as those of Enron, WorldCom etc. The main purpose of this act was to make the senior executives of the company such as CEO and CFOs accountable for the financial statements produced. They were now required to sign off all financial statements of the company and can no longer plead innocence by saying they were not aware. Other purpose of the act was to ensure that stock prices reflect the real value of the company and is not inflated artificially by the management to fool the investors. The SOX act also made accounting principles stricter also made both external auditing compulsory for every company. The external auditors who audited the company’s books were also to be held accountable for the financial statements shown by the company. The act also provided for strict penalties if the standards provided in the act were not followed.
Impact of the Act
After the SOX act has been passed I have seen internal audits being taken very seriously by my company. Earlier they were merely a formality but since external audit has also been made compulsory by the act so even internal audits are taken seriously and all attempts are made to iron out any irregularity before external audit occurs.
Review Student 1: Michael Lamb
I agree with the explanation of the SOX act which has been provided by Michael. All the implications as a result of the implementation of the act have been thoroughly discussed in the report submitted.
Review of Student 2 :Wilda Dent
Wilda has explained the implications of the act perfectly. I agree with the fact stated that SOX act has led to more focus on the financial being presented in all the company’s meetings as stated by Wilda. The skeleton of the act has also been explained properly.
Aicpa.org (2002). Summary of the Provisions of the Sarbanes-Oxley Act of 2002. [online] Retrieved from: http://www.aicpa.org/InterestAreas/ForensicAndValuation/Resources/FraudPreventionDetectionResponse/Pages/Summary%20of%20the%20Provisions%20of%20the%20Sarbanes-Oxley%20Act%20of%202002.aspx [Accessed: 10 Apr 2013].