sarbanes oxley?

Answer 1

BTW, don't follow the link above.

Don't know what you're looking for with regards to SarbOx, but here is the main website:

http://www.sarbanes-oxley.com/

Info on the history and implications:

http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act

Answer 2

Since you probably didn't want the legal description, (and who does except for lawyers) I'll break down what Sarbanes-Oxley has done to the world of corporate accounting and regulation.

For accountants, it set up an audit advisory board affectionately called Peek-a-boo (Public Company Accounting Oversight Board = PCAOB) that created and re-wrote a lot of auditing standards, giving auditors more stringent rules and detection techniques for uncovering fraud and corporate foolishness. To encourage the public companies to buy into the increased audit fees, It also required CEO and CFO sign-off of all financial statements as being free of "material misstatement" and allows for criminal negligence legal measures to be taken against the CEO-CFO in the event of fraud (a la WorldCom and Enron).

By the way, it's a common misconception that the people involved in the fraudulent activities at the times of the corporate accounting scandals were bad people trying to "hide the truth" from their stakeholders. It's not that CEO's and CFO's were behaving in a way they thought was wrong. They thought they were doing what was best for the company by using the legal and accounting techniques that were available to them to achieve maximum results from actual numbers. If you have a company that "really" has a net loss of 200 million dollars because they have 500 million in revenues and 700 million in expenses, then that will throw your stock price on a downward spiral if the "analyst expectation" is that your net income is supposed to be 200 million positive. So what a company like Enron would do is create a "variable interest entity" or many VIE's (a make-believe company that is created for a specific purpose) and funnel your losses into that entity or entities until your company numbers match up with what Wall Street was hoping for and expecting. Know what? VIE's are still around. Is it still going on? What do you think? Ask a CEO about this and he'd say something to the effect of "Well, don't you want your management to do the best job it possibly can, no matter what the situation? That's what we're trying to do." Hope that answers your question!

Answer 3

The Sarbanes–Oxley Act of 2002 (Pub. L. No. 107-204, 116 Stat. 745, also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or Sarbox; July 30, 2002) is a United States federal law passed in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, and WorldCom (recently MCI and currently now part of Verizon Businesses). These scandals resulted in a decline of public trust in accounting and reporting practices. Named after sponsors Senator Paul Sarbanes (D–Md.) and Representative Michael G. Oxley (R–Oh.), the Act was approved by the House by a vote of 423-3 and by the Senate 99-0. The legislation is wide ranging and establishes 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, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Some believe the legislation was necessary and useful, others believe it does more economic damage than it prevents, and yet others observe how essentially modest the Act is compared to the heavy rhetoric accompanying it.

The first and most important part of the Act establishes a new quasi-public agency, the Public Company Accounting Oversight Board, which is charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies. The Act also covers issues such as auditor independence, corporate governance and enhanced financial disclosure. It is considered by some as one of the most significant changes to United States securities laws since the New Deal in the 1930s.

Answer 4

www.soxinstitute.org