Question

Search the NAU Online Library for one article about Sarbanes Oxley. Search the Business Subject Guide or US NewsStream. Read your article in full. Then analyze the Sarbanes-Oxley act by responding to the following questions, in detail, on the discussion board:

Why did Congress pass the Sarbanes-Oxley Act? What is the purpose of this legislation?

What is the title, author, and source of the article you found about the Sarbanes-Oxley Act?

What additional information did you learn about the Sarbanes-Oxley Act from your article?

Answer 1

1) Why did Congress pass the Sarbanes-Oxley Act? What is the purpose of this legislation

Answer: Under the bush administration Congress passed the Sarbanes Oxley act as a result of corporate scandals that had shaken American investors trust. In the year 2002 Enron a blue chip energy utility went bankrupt due to the devious accounting practices which had permitted them to report future earnings on present balance sheets regardless if future earnings had been considered or not. As a result allowed Enron to inflate their profits year after year regardless if their projects made any revenue. Another scandal includes WorldCom which was one of the top internet and telecommunications organisation at the time. WorldCom was deliberately recording bandwidth expenses as assets to make their balance sheet appear more profitable thus more attractive than it actually was. Such scandals along with many more pressured congress into passing the Sarbanes Oxley legislation to safeguard the investors from the possibility of fraudulent accounting activities by corporations.

　

2) What is the title, author, and source of the article you found about the Sarbanes-Oxley Act?

Title: Governance in the spotlight;

Author: James E Orlikoff ; Mary Totten

Source: https://www.researchgate.net/publication/8245067_Governance_in_the_spotlight_what_the_Sarbanes-Oxley_Act_means_for_you

3) What additional information did you learn about the Sarbanes-Oxley Act from your article?

Answer: The Sarbanes-Oxley Act of 2002 in numerous waya has changed the role of financial statement auditors. It ensures the accuracy of the financial statement, independent auditors are now required to review a company’s internal controls and make the assessment report in the company’s annual report.