In: Finance
Has SOX lived up to its expectations over the last decade, and should there be a repeal of the act because companies which created this problem are no longer with us? please use your own words, and no handwritten please, thanks!
The Sarbanes-Oxley Act of 2002 came in response to financial scandals in the early 2000s involving publicly traded companies such as Enron Corporation, Tyco International plc, and WorldCom. The high-profile frauds shook investor confidence in the trustworthiness of corporate financial statements and led many to demand an overhaul of decades-old regulatory standards.
SOX lived up to its expectations over the last decade, as it has penalised the non-compliance and regular audit helps to check whether expectations are met or not.
But Financial world has changed significantly since 2002 and that the abuses Sarbanes Oxley was enacted to prevent are significantly less possible, largely due to electronic safeguards that are now commonplace. For example, transactions that were done by humans have now largely become electronic.
Although, critics claimed that it should be repelled, due to following reasons: -