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MEMORANDUM
UNIVERSITY OF PHOENIX

DATE: November 2, 2015
TO: Jason Johannes
FROM: Jasma Phillips
RE: The Cost and Benefits of Sarbanes-Oxley/ Forbes

ARTICLE SYNOPSIS

Sarbanes Oxley Act is “an act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations” (“Sarbanes Oxley Act,” 2015). In the review of “The Cost and Benefits of Sarbanes Oxley”, the article started out speaking on how the SOX Act 2002 was designed to protect investors, but many felt as if it was politically motivated. This Act will cause to lose risk takers and competiveness. In today’s business environment, the Sarbanes Oxley Act molded the ethical standpoint to numerous companies. The SOX Act 2002 was designed to keep companies honest. The criminal penalty for this law is a fine and/ or 25 years, but no more than 25 years. The stiff punishment minimized the fraudulent ideas from individuals and firms. The SOX Act 2002 increased the consumer confidence. “We only know that there were benefits in terms of financial reporting and corporate governance; that costs of implementation were higher for smaller companies; and that concerns about risk-taking and investment haven’t come to bear” (“The Cost and Benefit of Sarbanes and Oxley,” 2014, p. 1). This article also goes and talk about the cost and benefits of the Sarbanes Oxley Act 2002. SOX restrictions pushed several fraud-prone companies to go private. These was mainly the smaller companies that were fraud prone. I believe overall Sarbanes Oxley Act 2002 was good for the consumer and economy. Yet, it’s still undetermined that the SOX Act 2002 led to the crash of the economy in the 2008.

Sarbanes Oxley Act. (2015). In Investopedia. Retrieved from