Question

Choose one of the 11 titles in the Sarbanes-Oxley Act of 2002 and describe it. Do you believe this section is an effective deterrent to an accounting scandal? Why or why not?

Answer 1

Sarbanes Oxley Act ,designed to oversee financial report landscape for finance professionals.
The Sarbanes oxley Act of 2002 was passed due to accounting scandal at Enron , world com,Global crossing, etc,

Corporate Responsibility

• Title 3 contains eight sections and mandate senior executive take individual responsibility for accuracy and completeness of corporate financial reports.
• It defines interaction of external auditor and corporate audit committees and specifies the responsibilities of corporate officers for accuracy and validity  of corporate financial reports.
• it enumerates specific limits on the behaviour of corporate officers and describes specific forfeitures of benefits and civil penalties for non compliance. For example section 302 requires that company’s principal officer( CEO Or CFO) certify and approve integrity of their company financial report quarterly.

In the following ways they are effective

1. SOA crack down corporate frauds .
2. It created by public accounting over site board to oversee accounting industry
3. It banned company loan to executives and gave protection to whistleblowers
4. The ACT strengthen independence and financial literacy of corporate boards.
5. It’s purpose to review legislative audit requirements and to protect investors by improving accuracy and reliability of corporate disclosure
6. It holds CEO personally responsible for error in accounting audits
7. It protect investors from accounting frauds specifically those that are related to shares sold by public traded company
8. SOX requires internal control reports states that management is responsible for adequate internal control structure for their financial records

Conclusion:

Based on above Yes , This Section or SOX is a effective to accounting scandals