PAI_1_Sarbanes-Oxley_Act_KC

PAI_1_Sarbanes-Oxley_Act_KC - The Sarbanes-Oxley Act was...

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Unformatted text preview: The Sarbanes-Oxley Act was enacted to establish new or enhanced standards for U.S. public company boards, management, and public accounting firms. Why was the Sarbanes-Oxley Act needed?  How does the Sarbanes-Oxley Act protect stockholders and institutions? Describe the events that caused the passing of the Sarbanes-Oxley Act.  Relate the Sarbanes-Oxley Act to accounting.  Explain the goals of the Sarbanes-Oxley Act.  Describe each of the 11 titles of the Sarbanes-Oxley Act. Also known as the Public Company Accounting Reform and Investor Protection Act of 2002 l Created by US Senator Paul Sarbanes (D- Maryland) and US Congressman Michael Oxley (R-Ohio) l Signed into law July 30, 2002 l Most dynamic securities legislation since the Securities and Exchange Acts of 1933 and 1934 Establish new or enhanced standards for U.S. public company boards, management, and public accounting firms Bad accounting procedures, both intentional and non-intentional, led to the collapse and subsequent investigation of several large companies  Public outrage led Congress to pass SOX to regulate audits of public company accounting procedures and hopefully prevent false financial reports Companies that do not follow standard accounting procedures may use methods that mislead investors about the financial health of the company.  These practices range from just unethical to illegal. Failure of Boards of Directors and executives to double-check financial records  Intentional misrepresentation of financial status  Loans from major banks to risky companies hurt bank investors and encouraged others to make risky investments in those companies  Misrepresentation of company earnings caused stockholders to make seemingly good investments that cost them large sums of money Auditor conflicts of interest Some auditing firms provided consulting services to the companies they audited. services to the companies they audited....
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PAI_1_Sarbanes-Oxley_Act_KC - The Sarbanes-Oxley Act was...

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