DeAndre Adams
Dr. Gandy
Business Law 1-2
12-03-12
Sarbanes- Oxley Sarbanes-Oxley was enacted and became a law on July 30 , 2002 as a result of accounting and corporate scandals which affected millions. This Act was implicated to provide security from present and future scandals by strengthening the requirements of audit checks. This law has 11 major provisions such as PCAOB, Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns, and Corporate Fraud Accountability. A public accounting board also known as PCAOB was created to involve the Securities Exchange Commission in auditing. No longer are fraudulent auditing services able to be hired to perform company audits. This is to ensure that the responsibility of the audit remain within these companies. The lead auditor may not serve a term longer than five years anymore. Management may not monitor the auditing committee. These individuals are required to report to the auditing board. Members of the auditing board must not be involved with or receive any other funds from the company for any other service in which they are auditing. The auditing committee monitors the auditors instead of management. Most importantly, company CEO’s and CFO’s are being held responsible for their company’s financial statements. They are required to state these financial records and explain them. Any lack of compliance in reporting will cost these companies to pay back any money that they received from the statements that were falsely reported. This leaves