Policy Paper1

Policy Paper1 - Sarbanes-Oxley Act of 2002 AKA The Public...

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Sarbanes-Oxley Act of 2002 AKA The Public Company Accounting Reform and Investor Protection Act of 2002 Victor Lai 860881503 BUS 102 Dr. Sean D. Jasso
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Table of Contents Page. 2 Trace its Implementation Page 3- 4 Impact on Business and Society Page 4- 12 Policy Analysis Page 12-15 Recommendation Page 15-16 Introduction and History 2
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In December 2001, Enron Corporation filed for bankruptcy and soon collapsed. Based on news.bbc.co.uk Enron, which was founded in 1985, became a major power in the U.S. energy sector, and was controlling a quarter of all gas business. Because of its success, Enron went on to create markets in many energy related products. Before the company went bankrupt and fell off its high standing, it was known as one of the world’s biggest electricity, natural gas, pulp and paper, and communications companies. Although it was one of the biggest, it was found that throughout the years of Enron’s operation many strange and unethical accounting activities that helped it to get to the top were taken advantage of. Ever since then, Enron’s scandal along with companies like WorldCom, Tyco International and many other corporations have tarnished and destroyed the general public’s trust of businesses, and causing many to believe that there are other accounting scandals that’s yet to be uncovered. It is because of the unethical practices of these companies and the greedy leaders of these companies that have brought forth the Sarbanes-Oxley Act of 2002, which is also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and abbreviated to SOX. Taken directly from www.sec.gov , ‘On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession.” Tracing the Act’s Implementation 3
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The Sarbanes-Oxley Act was created to counteract the at-the-time corporate misbehaviors of many large companies. This Act serves as a tool to resolve this problem, and it is something that can get back the trust of the public and also made sure that the executives of those companies that were involved in the scandals took responsibility for the actions of their company and this applies to all others as well. This policy, which consists of eleven titles, addresses problems and overviews the implementation of instructions that companies are suppose to follow. However this law which was created to help the business market get back up on its feet also has its group of challengers. Although it has anti-groups and such, the Sarbanes-Oxley Act is arguably a law that is
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This note was uploaded on 11/28/2011 for the course BUS 102 taught by Professor Jasso during the Spring '09 term at UC Riverside.

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Policy Paper1 - Sarbanes-Oxley Act of 2002 AKA The Public...

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