Question

write a paper on Sarbanes Oxley,This is a research paper and must include at least two professional resource references in APA or MLA format.

Answer 1

Passed on July 30, 2002 by the US Congress the Sarbanes Oxley act has the objective of protecting the investors from fraudulent accounting practices of corporate entities. The financial disclosures made in the financial statements must be of appropriate standards in order to reflect the true and fair picture of an organization. This act promulgated strict reforms to improve the financial disclosures and their qualities to improve the financial statements. Following number of accounting malpractices that came to the forefront in early 2000s the Sarbanes Oxley Act was created to overhaul the regulatory standards governing the financial statements and financial disclosures of companies (Chhaochharia et. al. 2016). The Act made sweeping changes in the reforms in number of areas that include the following:

1. Corporate social responsibility.
2. Reforms to increase criminal punishments.
3. New accounting regulations.
4. Protection measures to protect investors from accounting frauds.      

Two most important provisions of the act:

Section 302 of the act made it mandatory for the senior management to certify the accuracy of financial statements and section 404 of the act requires the auditors and senior management to certify about the accuracy of the internal controls of the organization.

The main objective of the Sarbanes Oxley Act is to provide protection to the investors from fraudulent accounting practices of corporations and the act has managed to achieve that successfully since its enactment (Banerjee et. al. 2015).

References:

Chhaochharia, V., Grinstein, Y., Grullon, G. and Michaely, R., 2016. Product market competition and internal governance: Evidence from the Sarbanes–Oxley Act. Management Science, 63(5), pp.1405-1424.

Banerjee, S., Humphery-Jenner, M. and Nanda, V., 2015. Restraining overconfident CEOs through improved governance: Evidence from the Sarbanes-Oxley Act. The Review of Financial Studies, 28(10), pp.2812-2858.