History of Sarbanes Oxley Act
Summary Sarbanes Oxley was made by both Oxley and Senator Paul Sarbanes present two different bills, but both aimed at meeting with the accounting disparities of various companies following a certain ...
Summary Sarbanes Oxley was made by both Oxley and Senator Paul Sarbanes present two different bills, but both aimed at meeting with the accounting disparities of various companies following a certain pattern of rules and regulations. The bill that was presented by Oxley stated the financial status of any company. The other features of this bill are that it stated the accountability and responsibility of bringing the financial status of any company clear and transparent.
The other bill that was presented by Paul Sarbanes had some or the other kind of features that of dealt with accounting was almost same as that of Oxley. Both the bill of Oxley and Senator Paul Sarbanes was presented to the Senate Banking Committee, who passed these bills with huge majority. When both the bills were combined Sarbanes Oxley Act came into existence. This law was incorporated when President George William Bush signed it and he added that the enforcement of this law will have a far reaching effect on the working pattern of business organizations.
Reason of origin for Sarbanes Oxley Act
Summary Sarbanes Oxley was an act that was passed in the year 2002. It is otherwise known as Public Company Accounting Reform and Investor Protection Act of 2002. The common name given to this act is Sarbox or SOX. This was a federal law passed in the house of United States of America. This law came into existence was a number of scandals related to accounting in major corporate centers of the USA, such as Tyco International, Enron, WorldCom and Peregrine Systems. These accounting scandals reduced the faith of people in both reporting and accounting practices of these big giant corporate. But when Sarbanes Oxley Act was enforced into the working pattern of any organization then it helped in bringing a check its accounting pattern, financial disclosure and governance.
Different titles of Sarbanes Oxley Act
Sarbanes Oxley Act has a certain pattern of requirement that helps in maintaining a well intact financial report of any company. Summary Sarbanes Oxley has eleven titles and here are some of those titles-
— Public Company Accounting Oversight Board
This title helps in providing an independent audit services that help in creating an overall view of audit functioning of any company.
— It gives independence to auditors
This title contains nine sections that help in establishing a certain pattern for external auditors that helps in decreasing the conflict of views.
— It provides a certain amount of corporate responsibility
This title makes individual senior executives responsible for any act of their work.
—It enhances the scope of financial disclosure
This title states that that finance transaction of any company needs to be clear and transparent.
—Measures taken to check analyst conflict
It takes proper care that there is no conflict of idea in the working pattern of any company
— Resource of commission and authority is to be maintained
It gives a guideline to be followed maintaining a strict set of practices and there are many other titles that help in maintaining a better accounting department of any company.
Summary Sarbanes Oxley is also found in corporate world in form of well designed software that makes the whole process easier and convenient. The finance report provided by this software helps giving summary Sarbanes Oxley in accordance with legislation.
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