Question

I have a question. The question says " Based on the video, "Bigger than Enron", discuss three different components of the Sarbanes-Oxley Act(SOX) that were a result of recent fraudulent events.
?What does this question mean? Is this the major purpose of Sarbanes-Oxley Act?
Please help me. Thanks!

Answer 1

SOX is a United state law that sets Requirements for all U.S. public company , management and public accounting firms. It was designed for the specifying purpose of restoring public trust in corporate financial statements(CFS). Prior to the enactment of SOX, investors suffered significant losses due to corporate failures brought on by financial malfeasance.

hence,the question is related to components of surban-oxley act that means as per "bigger than enron" vedio which cover the fraudulant activity done by chair person and which effect to society and employee also. as the question asked in the sense of major part or point of sox in this type of activity. it is not about purpose of sox (purpose cover object of sox)

SOX Components

Establishment of the PCAOB Auditor Independence

Corporate Responsibility

Enhanced Financial Disclosures

Analyst Conflicts of Interest

Commission Resources and Authority

Studies and Reports

Corporate and Criminal Fraud Accountability

White-Collar Crime Penalty Enhancement

Corporate Tax Returns

Corporate Fraud Accountability

Detail info.

The Sarbanes-Oxley Act of 2002 cracks down on corporate fraud. It created the Public Company Accounting Oversight Board to oversee the accounting industry. It banned company loans to executives and gave job protection to whistleblowers. The Act strengthens the independence and financial literacy of corporate boards. It holds CEOs personally responsible for errors in accounting audits.