Introduction

The Sarbanes – Oxley Act of 2002, signed by President Bush on 30th July 2002 bestow much tougher regulatory and enforcement powers. The Sarbanes-Oxley Act came into force mainly due to financial scandals committed by corporate giants. After its enforcement accounting system and financial statements exposed by the companies made remarkable progress. This has become possible mainly due to the rigorous requirements stated in the Sarbanes- Oxley Act. This helped the investors to restore their confidence in the companies and U.S legislature as well. (Powers, E. 2009).
The Sarbanes –Oxley Act raises the standards of corporate transparency and accountability. The standards include enhanced sanctions, criminals as well as civil and to ensure compliance. The Act comply a responsibility over CFO and CEO to maintain an open and honest relationship with the shareholders of the corporation. Sarbanes-Oxley Act is a tool to help the directors and officers of the public corporations to do the job they have been hired for and do it honestly. It is the job of the CEO and CFO to attract and retain a loyal foundation of shareholders and loyalty can be built upon trust and confidence and the trust and confidence in any relationship grow from transparency and accountability. (Friedman, J. 2002)
These have its significance in overall market. It helped in establishing the Public Company Accounting Oversight Board (PCAOB), imposes greater criminal penalties for corporate fraud, establishes auditor independence and corporate responsibility, enhance financial disclosures internal controls, and prohibits auditors from performing certain non audit services for their audit clients. The Sarbanes-Oxley Act has economic significance as well and it has been widely acknowledged. It ensures that the code of ethics implemented by the corporation and good relationships with the week entities or parties that may have a significant current or future effect on the financial condition, operations expenses, revenues or liquidity. (Zhang, I.X., February 2005) The Act highlights the Increased Transparency and disclosure, It provides enlarged and clearly defined responsibilities for the Audit Committee, The public certification of financial reports and internal controls by CFO and the CEO., An accurate insider transaction of the prescribed course of exercise, Public auditors are liable to increase regulation under the new Public Company Accounting Oversight Board (SEC).Under the Sarbanes- Oxley Act the Chief Executive Officer and Chief Finance Officer are personally liable for treating their