Question

Why did the Sarbanes–Oxley Act become law? In your opinion, does it provide any real protection to investors? Why or why not?

Answer 1

In the early 2000's there was series of fraud's happened which effect's the economy drastically which leads to the necessity of controlling these type of fraud's. In order to control these United states government has proposed one new act in 2002 named Sarbanes-Oxley Act which was named after the bill sponers of this act Mr.Paul sarbanes and Mr. Micheal G Oxley.

This act is also called SOX which is mainly implemented to increase the transperansy in the financial auditing and to Protect the Investors. As mentioned the main reason behind the SOX Act was to control the fraud in financial auditing. This law proposes the top management is responsible for financial accuracy.

This law will definitely provide the real time protection for the investors and one of the major reason for introducting this law is to protect the investors. This law greatly increases the transperansy in the financial auditing by which auditors can easily find the looholes in the reports by this accuracy in the financial reports will be maintained and by that there will be no chance of fraud. By this investors are als will get to know the acurate information.