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The Sarbanes-Oxley Act

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The Sarbanes-Oxley Act of 2002 is a legislative response to a number of corporate scandals that sent shockwaves through the world financial markets. Some of the biggest issues involved Enron, Tyco and WorldCom. The Sarbanes-Oxley Act, commonly referred to as SOX, attempts to strengthen corporate oversight and improve internal corporate control. The main purpose of the Sarbanes-Oxley Act is to protect shareholders from fraudulent representation in corporate financial statements. Investors need to know that the financial information they rely on is truthful, and that an independent third party has verified its accuracy. During the late 90’s and early 2000’s, several key companies in the United States were exposed for fraudulent reporting profits

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