Preview

Sarbanes Oxley Act of 2002

Better Essays
Open Document
Open Document
1322 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Sarbanes Oxley Act of 2002
Sarbanes-Oxley Act of 2002
Descriptions of the main aspects of the regulatory environment which will protect the public from fraud within corporations are going to be provided in this paper. A special attention to the Sarbanes – Oxley Act of 2002 (SOX) requirement; along with an evaluation of whether Sarbanes-Oxley Act will be effective in avoiding future frauds based on their implemented rules and regulations.
The main aspects of the regulatory environment are based on the different laws and regulations the different governmental institutions such as federal, state, and local developed to create control over business practices. The regulatory environment creates a positive business financial operational environment as well as efficiency in management, integration of capital flow and domestic savings. For instance, the Securities Act of 1933 which provides regulations and laws to those offering corporate stocks to the public (University of Phoenix, 2014). Another regulatory environment is the Securities Act of 1934. The Securities Act of 1934 regulates and uses laws for trading stocks on markets that are consider as secondary markets like the New York Stock Exchange. The Securities Act of 1933 also provides the requirements for financial reporting and auditing for corporations (University of Phoenix, 2014).
When looking at the history of the business environment regulatory compliance has been part of the process of conducting business. In addition, in most industries the different organizations are going to find different rules and regulations that are presented by the government, requiring companies to follow them. In the event, these are not followed the business will be confronted with penalties for not following the regulations that are clearly defined by the government.
As time progresses, many regulations were created to help and prevent fraud against the public. Some of these regulations include the requirement of state filing, and laws to create fair



References: Corporate Secretary. (2014). Ten events that have changed corporate governance. Retrieved from http://www.corporatesecretary.com/articles/regulation-and-legal/12277/ten-events-have-changes-corporate-governance/ University of Phoenix. (2014). Week 1 Study Guide: Introduction to Financial Reporting. Retrieved from University of Phoenix, ACC561 - Accounting website. U.S. Securities and Exchange Commission. (2013). The Investor 's Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved from http://www.sec.gov/about/whatwedo.shtml U.S. Securities and Exchange Commission. (2013). Codification of Staff Accounting Bulletins. Retrieved from http://www.sec.gov/interps/account/sabcodet1.htm

You May Also Find These Documents Helpful

  • Good Essays

    Regulatory risks are risks associated with the failure to comply with a whole host of governmental regulations. Such risks impact a company’s existing assets, earnings, and often, reputation. In the context of tort liability arising out of non-compliance of government regulations, it is in every company’s business interest to allocate resources to identify those risks, and to implement action plans to avoid such risks. In the event those risks do materialize, the company needs to have system in place to properly manage and contain monetary and reputational loss to the company. Additionally, companies will also benefit by anticipating what regulatory changes are upcoming so as to adjust the business practices accordingly, thereby minimizing the exposure to tort liability arising out of non-compliance of regulations.…

    • 1350 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    Regulatory Competition

    • 5004 Words
    • 21 Pages

    Regulatory competition can be defined as the process where regulators deliberately set out to provide a more favourable regulatory environment, in order either to promote the competitiveness of domestic industries or to attract more business activity from abroad. The setting of national regulations in response to the actual or expected impact on internationally mobile goods, services or factors on national economic activity may lead to a form of arbitrage by economic actors across the various market opportunities.…

    • 5004 Words
    • 21 Pages
    Powerful Essays
  • Powerful Essays

    This paper will describe the role of the United States Constitution and the United States legal system in business regulation. The recent business regulations in US businesses will be outlined and further explanation on how the economic growth created by private business and how the US government could not sustain itself. This paper will examine an example from an article which demonstrates how a Constitutional right affects a business and how the legal system is used with respect to recognizing or protecting that right.…

    • 1611 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Government regulation has always been an important part of business as “regulations are essential for the proper functioning of society and the economy” (Ingram , n.d). A business is designed to generate revenue for its employees, employers and shareholders (Chindamo, Pg. 4-9, 2011). In a bid to keep increasing revenue, businesses throughout history have conducted trade using dubious, unsafe, and exploitive methods. In a bid to stem companies conducting business in an unsafe and unethical manner, the government has employed several methods to regulate this issue (Ingram, n.d). Business regulation has been highly debated in the past as there both advantages and disadvantages, but the benefits of business regulation greatly out way its costs. (Ingram, n.d) The government uses diverse methods of regulation, which include advertising, environmental protection and privacy. (Holt, n.d)…

    • 731 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Swot - Pepsi and Coca Cola

    • 1151 Words
    • 5 Pages

    Congress established laws designed to restore and maintain investor confidence in capital markets by providing structure and government oversight. Securities laws and regulations were established to deter fraud and misrepresentation in connection with the offer and sale of securities. This program is directed at detecting and sanctioning fraudulent activity in the securities markets, including fraud by brokers, dealers, investment advisers and investment companies, financial fraud by issuers of securities, fraud in securities offerings,…

    • 1151 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Regulation is setting up of rules (Gowland, 1990). Regulations are imposed for our own protection. In the business and financial world, regulations play a vital role in the structuring of the system. Without regulations, the businesses and economies would fail. The financial world’s main reason for existence is to deal with money. Financial world comprise of stock markets, banks, insurance companies etc. The financial markets control the money in every aspect possible. This is the reason regulating the financial markets is necessary.…

    • 2927 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    The Securities and Exchange Commission (SEC) is a government agency that has been given several responsibilities and a great deal of power. Its mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate formation” (About the SEC, 2008). The SEC is responsible for enforcing several federal security laws, including the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002 (About the SEC, 2008). The Sarbanes-Oxley Act was passed in response to several corporate scandals such as Enron and WorldCom, after investors lost billions of dollars, and after the public’s confidence in the security of the nation’s markets declined (Wikipedia, 2008). Businesses comply with the SEC by following the rules and regulations that have been set in place. Failure to follow these regulations will result in disciplinary action.…

    • 720 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    acco 400 book condensed notes

    • 55914 Words
    • 224 Pages

    - 1934 creation of the SEC with a focus on protecting investors by means of a disclosure based structure…

    • 55914 Words
    • 224 Pages
    Powerful Essays
  • Good Essays

    sdss sds d ds ds d

    • 337 Words
    • 2 Pages

    A closely related problem is that determining and enforcing disclosure standards necessarily involves government regulation, thereby adding to the ultimate cost to the consumer by way of higher taxes. Finally, failure to comply may result in regulatory fines, a cost that may either have a chilling effect on product innovation or be passed on to the customers in the form of higher prices. Either result operates to the detriment of the consumer, the vary party whom the regulations are designed to protect.…

    • 337 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Entrenuership Unit 3

    • 392 Words
    • 2 Pages

    First of all, the definition of regulation is a “rule designed to control the conduct of those to whom it applies. Regulations are official rules, and have to be followed” (Investorwords.com, 2010). Regulations are placed to protect businesses, and the consumers. If people and businesses…

    • 392 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Government Regulates business in other way as well. Antitrust law are enacted to help prevent companies from merging or joining together, in order to control the supply and price of a product or service. These laws help maintain competition among businesses. Economic regulation are establish to ensure safety , to promote competition and to protect consumers, business in a free enterprise system are…

    • 485 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    2. Securities and Exchange Commission (SEC). The Securities and Exchange Act of 1934 created the Securities and Exchange Commission (SEC) to regulate the securities market. “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”(U.S. Securities and Exchange Commission, 2008)…

    • 791 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    P2 Ias

    • 2610 Words
    • 11 Pages

    2. Regulatory: Regulatory are boundaries of rules and regulation like- Company law, National standards of accounting, Stock exchange regulation, Sometimes IAS if country adopt it etc.…

    • 2610 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Personalized Medicine

    • 10288 Words
    • 41 Pages

    Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Law, Value Creation, and Risk Management 2 Ethics and the Law 21 Courts, Sources of Law, and Dispute Resolution 59 Constitutional Bases for Business Regulation 113 Agency 157 Administrative Law 183…

    • 10288 Words
    • 41 Pages
    Powerful Essays
  • Better Essays

    Numerous and several types of laws regulate the activities of all businesses and everyone involved in the business, from owner to manager to employees.…

    • 4124 Words
    • 17 Pages
    Better Essays