Sarbanes-Oxley Act (SOX)

Examples of Sarbanes-Oxley Act (SOX) in the following topics:

• Ethical Considerations

  • For example, in response to a number of major corporate and accounting scandals -- including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom -- the Sarbanes-Oxley Act (SOX) of 2002 was put into place.
  • SOX -- also known as the "Public Company Accounting Reform and Investor Protection Act" in the Senate and "Corporate and Auditing Accountability and Responsibility Act" in the House -- is a United States Federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms.
  • As a result of SOX, top management must now individually certify the accuracy of financial information.
  • Also, SOX increased the independence of the outside auditors who review the accuracy of corporate financial statements and increased the oversight role of boards of directors.
  • The 1934 Act also established the SEC.

• Types of Organizational Branding Deliverables

  • The financial statements are usually compiled in compliance with International Financial Reporting Standards (IFRS) and/or the domestic Generally Accepted Accounting Principles (GAAP), as well as domestic legislation (e.g. the Sarbanes-Oxley Act (SOX) in the U.S.).

• Sarbanes–Oxley Act of 2002

  • The Sarbanes–Oxley Act is to set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.
  • The Sarbanes–Oxley Act of 2002 is a federal law that set new or enhanced standards for all public company boards, management, and public accounting firms in the United States.
  • It is also known as the Public Company Accounting Reform and Investor Protection Act (in the Senate) and Corporate and Auditing Accountability and Responsibility Act (in the House) and more commonly called Sarbanes–Oxley, Sarbox or SOX.
  • Oxley (R-OH).
  • Identify the responsibilities imposed on companies by the Sarbanes-Oxley Act of 2002

• Sarbanes–Oxley Act of 2002

  • The Sarbanes–Oxley Act is a US federal law enhancing standards for all US public company boards, management and public accounting firms.
  • The Sarbanes–Oxley Act of 2002 is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms.
  • It's more commonly called Sarbanes–Oxley, Sarbox or SOX; it is named after sponsors U.S.
  • Senator Paul Sarbanes (D-MD) and U.S.
  • Oxley (R-OH).

• Defining Corporate Governance

  • Contemporary discussions of corporate governance tend to refer to principles raised in three documents released since 1990: The Cadbury Report (UK, 1992), the Principles of Corporate Governance (OECD, 1998 and 2004), the Sarbanes-Oxley Act of 2002 (US, 2002).
  • The Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, is an attempt by the federal government in the United States to legislate several of the principles recommended in the Cadbury and OECD reports.

• Chapter Questions

  • Did the U.S. federal government fix corporate fraud after passing the Sarbanes-Oxley Act in 2002?

• Whistleblower Protection

  • The Whistleblower Protection Act safeguards government employees from management retaliation.
  • The No Fear Act prohibits federal managers and supervisors from engaging in unlawful discrimination and retaliation.
  • The Sarbanes-Oxley Act requires that an individual blow the whistle on an employee who they have evidence has violated the law.
  • Securities whistle-blowers are provided expanded incentives and protection by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
  • The Freedom of Information Act can be used by a whistle-blower to gather evidence that the public's right to know has been violated.

• Current Issues in Reporting and Disclosure

  • Following the Enron scandal, changes were made to mark to market via the Sarbanes-Oxley Act in 2002.
  • Sarbanes-Oxley affected mark to market by forcing companies to implement stricter accounting standards.
  • This act also implemented harsher penalties for fraud, such as enhanced prison sentences and fines for committing fraud.

• Protecting Whistleblowers

  • The Lloyd-La Follette Act of 1912 guaranteed the right of federal employees to furnish information to Congress.
  • The first US environmental law to include employee protection was the Clean Water Act of 1972.
  • Similar protections were included in subsequent federal environmental laws including the Safe Drinking water Act (1974), Energy Reorganization Act of 1974, and the Clean Air Act (1990) .
  • In passing the 2002 Sarbanes-Oxley Act, the Senate Judiciary Committee found that whistleblower protections were dependent on the vagaries of varying state statutes.
  • Federal employees could benefit from the Whistleblower Protection Act as well as the No-Fear Act, which made individual agencies directly responsible for the economic sanctions of unlawful retaliation.

• Corporate Social Responsibility

  • When natural persons have mixed motives—you give a hundred bucks to the opera because you want your boss, who supports the opera, to think well of you—we somehow know that this is not an unambiguously laudable act.
  • Corporations as a matter of fact, can only act with "mixed motives".
  • This is underscored by new laws such as Sarbanes-Oxley Act of 2002 and the almost two decade old US Federal Sentencing Guidelines (policy guidelines established in part to determining corporate criminal punishment in US Federal Courts).
  • Sarbanes Oxley is particularly interesting given Payne's compliance/integrity construct, in that it requires both integrity structures (such as a corporate board of ethics, and internal protections for whistleblowers) and increases fines for violation of anti-trust and other federal statutes regulating inter-state corporate behavior.