Sarbanes-Oxley Act

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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.

Sarbanes-Oxley Act

The congressional legislation that regulates certain corporate financial activities and improves the accuracy of financial statements. Among other things, the act prohibits personal company loans to directors and officers, requires certification of financial statements by a firm's chief executive officer and chief financial officer, protects employee whistle-blowers, increases criminal penalties for securities law violations, requires disclosure of off-balance-sheet financing, and calls for improvement in the accuracy of pro forma financial statements. The act was passed in 2002 in response to widely publicized corporate accounting scandals.

Sarbanes-Oxley Act

see CORPORATE GOVERNANCE.

Sarbanes-Oxley Act

see CORPORATE GOVERNANCE.
References in periodicals archive ?
SARBOX does not regulate non-profits but is a wake up call for good governance for all organizations with outside stakeholders.
And some SEC commissioners have joined the Street in bashing Sarbox reporting requirements.
One CEO has had front-line experience on both sides of the IT-finance battleground, and he says that many CFOs would like to see CIOs left out of the Sarbox equation.
Millions of dollars are floating around daily, creating possibilities for theft, money laundering, tax evasion, and, especially relevant to Sarbox, accounting problems.
The accounting scandals of the last few years resulted in new rules known as the Sarbanes Oxley Act SARBOX for publicly held corporations.
Tellingly, it's the business strategy element of their role that many CFOs find most rewarding, so much so that it compensates for the Sarbox compliance-related processes many CFOs find so tedious.
Sarbox, with all its onerous requirements on accounting and corporate governance rules and its eye-wateringly large compliance costs, is driving companies out of U.
SarbOx also requires that auditors (though not necessarily auditing firms) switch out every five years, and it prohibits auditors from jumping ship to executive positions at companies they have just audited.
Larry White's "Perspectives" column (August 2004) on accounting profession balance in the Sarbox age was quite timely and hits the mark with financial managers of operating businesses.
Company processes, people and facilities are fully certified and compliant with federal and industry regulations including HIPAA, Sarbox, NARA 36 CFR, ISO 9001, SOC 2 and NAID.