Sarbanes-Oxley Act Prior to the Term Paper

Open, View, and/or
Download this Document

Total Length: 1199 words ( 4 double-spaced pages)

Total Sources: 3

Page 1 of 4

The statute of limitation for the discovery of fraud is increased to two years from discovery date and five years following the act. Criminal penalties for securities fraud was increased to 25 years, by SOX.

Each public company's CEO and CFO must certify financial statements and reports. Personal loans are banned, to executive officers and company directors, with the enactment of SOX. It is also now required to accelerate reporting of insider trading ("H.R. 3763").

In addition, SOX now prohibits insider trading during pension fund blackouts. Compensation and profits for the CEO and CFO must be made public.

Auditor independence is now specifically required. and, American companies must have an internal audit function, that is certified by external auditors. Audit firms are prohibited from providing services, unrelated to their audit work, to clients. One of the most important provisions is an increased accountability, holding CEOs and directors accountable, for crimes of the organization, even if they had no knowledge of the crime. and, lastly, SOX provides provisions to protect corporate whistleblowers ("H.R. 3763"; Collins).

Major Impacts on Accounting Information Systems of SOX:

SOX deems management accountable for the accuracy of their financial reporting, as noted above. Beard and Wen note,

Management is expected to establish, evaluate, monitor, and provide written assessments of internal controls, which include policies and procedures that -- pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the registrant, provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorization of management and directors of the registrant; and provide reasonable assurance regarding the prevention or timely detection of any unauthorized acquisition, use, or disposition of the registrant's assets that could have a material effect on the financial statements.

Stuck Writing Your "Sarbanes-Oxley Act Prior to The" Term Paper?

View All Our Example Sarbanes-Oxley Act Prior to the Term Paper

Have A Custom Example Essay Written



With this increased level of accountability and increased demand for effectiveness of internal controls, due to SOX, accounting information systems must be more rigorous than ever. In addition, they must be even better protected against security threats to the organization's financial reporting systems, than ever.

Overall Implications and Conclusion:

In the end, the corporate accounting scandals of the early 2000s forever changed the accounting industry. Faltering investor confidence required the government to take action, and as such, SOX was enacted. The historic piece of legislation took away the self-regulation from the accounting industry and increased accountability for corporate management. Auditor independence and increased requirements for certified internal controls are all part of the overall implications of SOX.

As implemented, SOX has also required more rigorous accounting information systems, with the new demands for accountability, accounting information systems must also be more protected against security threats. Although a fairly new piece of legislation, SOX will likely continue to affect corporate America for years to come......

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Sarbanes-Oxley Act Prior To The" (2007, December 03) Retrieved July 3, 2025, from
https://www.aceyourpaper.com/essays/sarbanes-oxley-act-prior-33699

Latest MLA Format (8th edition)

Copy Reference
"Sarbanes-Oxley Act Prior To The" 03 December 2007. Web.3 July. 2025. <
https://www.aceyourpaper.com/essays/sarbanes-oxley-act-prior-33699>

Latest Chicago Format (16th edition)

Copy Reference
"Sarbanes-Oxley Act Prior To The", 03 December 2007, Accessed.3 July. 2025,
https://www.aceyourpaper.com/essays/sarbanes-oxley-act-prior-33699
   

Open, View, and/or
Download this Document
order custom essay example