Law 421 - Article Review

Article Review Week Five

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LAW 421

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Individual Article Review

The Sarbanes-Oxley Act (referred to as SOX) turned into a law by vote of the legislature during 2002. The SOX Act directly influences the duties of auditors, board of directors, and company administrators with respect to fiscal reports. The SOX act also set up the Public Companies Accounting Oversight Board (PCAOB). The oversight board is directly accountable for the oversight of fiscal reports audits of openly traded organizations and the establishment of auditing requirements in the United States of America. They don't have any obligations in the private trading markets. The objective of this act was to aid in increasing the investor confidence in fiscal records, which companies issued. Confidence was lost because of incorrect reports, leading to huge amounts of money lost by shareholders. The SOX Act needed a total change of the existing requirements of fiscal accounting and auditing requirements. While these requirements and rules are now being included in the system, there will definitely be required modifications, and additions to those terms. But, if these types of implementations will increase the sincerity and successfulness of fiscal reports has not yet been seen. One thing for certain is the board of directors, outer auditors, and company administrators have a higher obligation to make sure correct and timely fiscal records are supplied for shareholders.

Legal Issues

The Sox act was developed into law following the failure of large companies for example Enron and Adelphia. These corporations' falsified papers and figures in fiscal reports revealed to shareholders so as to gain shareholders under wrong expectations of investment earnings. The SOX act would end the bogus actions of large companies during the 1990's that blown up their share prices by posting deceptive and bogus fiscal reports.

Managers Perspective

The issues involving companies reporting incorrect and falsified fiscal reports, was most likely a long time problem. Once the Enron scandal made the general public