Question

Why does Sarbanes Oxley in practice affected MIS departments as much or more than accounting departments?

Answer 1

ANSWER - The Sarbanes Oxley Act changes management's responsibility for financial reporting significantly.The act requires that top managers personally certify the accuracy of finanacial report.

THe Sarbanes Oxley Act or which is popularly called Sox was enacted by President George Bush in July 2002.This law was passed in response to discovery of monumentals scandals of many leading American organization,whose managements exploited the loopholes in accounting practics to carry out huge financial frauds.

While SOX Act is primarily aimed at making management more accountable in their financial management practices,because of which the management have had to make major changes into the financial reporting practices and another profession that has been impacted in a major way by the passage of the Sarbanes Oxley Act is the accounting profession.

This is because of the fact that while the management has to show greater transparency,it is the professionals in the accounting profession who have to carry out these changes and present them to the concerned authorities.this require them to implement a number of major changes into the accounting and reporting practices.