Sarbanes Oxley Act of 2002

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Sarbanes Oxley Act of 2002

Legislation passed largely as a result of a number of accounting scandals. Among the many features is the creation of the Public Company Accounting Oversight Board. This board is charged to: The Board shall: 1) register public accounting firms; 2) establish, or adopt, by rule, auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports for issuers; (3) conduct inspections of accounting firms; (4) conduct investigations and disciplinary proceedings, and impose appropriate sanctions; (5) perform such other duties or functions as necessary or appropriate; (6) enforce compliance with the Act, the rules of the Board, professional standards, and the securities laws relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants with respect thereto; (7) set the budget and manage the operations of the Board and the staff of the Board.

Sarbanes Oxley Act of 2002

Legislation in the United States, passed in 2002, intended to increase transparency in accounting practices. It was adopted in the wake of a series of scandals involving aggressive accounting on the part of a number of major accounting firms, notably Arthur Andersen. Among other provisions, it created the Public Accounting Oversight Board to regulate accounting firms that provide auditing services. It established and enhanced provisions for auditor independence and financial disclosures to limit potential conflicts of interest. It introduced a requirement that the chief executive officer must sign a corporation's tax return and enhanced punishments for white collar crime. Proponents argue that the Act has increased transparency in public accounting, while critics contend that it has driven business outside the United States.
References in periodicals archive ?
In order to improve corporate governance and restore investors' confidence in the stock markets, President Bush signed into law the Sarbanes Oxley Act on July 30, 2002.
Green (second from right), the first chief administrative officer of Well, Gotshal and Manges, is the author of Manager's Guide to the Sarbanes Oxley Act: Improving Internal Controls to Prevent Fraud, and Sarbanes-Techniques and Best Practices for Corporate Governance.
Securities & Exchange Commission developments and the Sarbanes Oxley Act. This will provide the most recent information on the complex ramifications of SEC rules and regulations and Sarbanes Oxley to clients of Mikunda Cottrell and to Chugach Electric Association, where Cottrell serves as board secretary and chairman of the audit committee.