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Article Review: Sarbanes-Oxley Act of 2002
It is unfortunate that many increasing standards come after a failure in the system. The Sarbanes-Oxley Act of 2002 is a primary example. The public scandals of Enron, Tyco and WorldCom were quickly followed with this act. It brought great change throughout the world of business. The Act was enacted in July of 2002 and co-authored by U.S. Sen. Paul Sarbanes of Maryland and U.S. Rep. Michael Oxley of Ohio. The Sarbanes-Oxley Act gave more confidence in investors and creditors when it comes to fraud by reforming reporting standards. Although the market took a huge hit after the collapse of several major companies between 200-2004, the Sarbanes-Oxley began to rebuild the market and the ethical standards within it.
The Sarbanes-Oxley brought about many other aspects besides the act itself. In turn, the Public Company Accounting Oversight Board was created, assessment of liability with auditors was enacted, new internal control procedures, and more liability for all involved. The oversight Board is responsible for monitoring public accounting companies and performs regular audits. Sarbanes-Oxley intended for two main things with the market; to boost the confidence of investors in a previously broken market, and to decrease fraud.
Along with positives, the Sarbanes-Oxley Act brought on some negative aspects as well. Some public companies required to comply with Sarbanes-Oxley are subject to additional costs directly assigned to the legislation. These costs include increased expenses for required annual audits and the purchase to create, track and review an internal control software system. Other costs occur if any of the requirements of the act are broken. Penalties for non-compliance are steep and can be very expensive, some may face jail time. Criminal penalties now exist for influencing US agency

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