Question

The Sarbanes Oxley Act is sometimes described as the "full-employment act for accountancy." Why do you think it is often characterized that way?

Answer 1

In 2002 the Sarbanes-Oxley Act was introduced with a motive to provide assurance about the completeness and accuracy of financial statements. It's intent of the regulation was to restore investors’ confidence and prevent the collapse of equities in the markets. The SOX is often characterized as full-employment act in the accounting. SOX Act has made business entities accountable for their actions and safeguard investors to see the accurate financial reporting. It has provided protection to shareholders and boosts the confidence of potential investors.

Sarbanes Oxley Act has affected internal controls of company that it takes to ensure that its financial processes are safe from unauthorized use or employee theft. The act requires board of directors and corporate executives to pay closer attention to the organization's internal controls; and forces them to take responsibility for internal processes and make sure they are both effective as well as reliable. The business must keep full-employment act for accountancy by keeping the records up to date and accurate; and must run honestly from the top to the bottom with no exceptions.