The purpose of the Sarbanes Oxley Act


Sarbanes Oxley Act of 2002 was passed by the general demand grew because of shameful exposure of several senior financial scandal in which a number of large corporations involved. A number of Fortune 500 companies found involved in this scandal and investor confidence had hit rock bottom. The purpose of the Sarbanes Oxley Act was to strengthen the Securities and Exchange Commission in the United States so that it can keep an eye on corporate governance and investor confidence in the market should be reinstated.

Despite overflowing amount of legalese, there are two main purposes of the Sarbanes Oxley Act. They are to ensure transparency and accountability of the implementation of Sarbanes Oxley compliance. These purposes are fulfilled in pain, guilt or punishment or both. President Bush informed that no laws of such significance for the company have been signed since the presidency of Franklin D. Roosevelt in the United States reflected the importance of this act.

primary purpose

main purpose of the Sarbanes Oxley Act is to ensure that the corporate sector works with transparency and provides full disclosure and when necessary. Transparency of purpose of Sarbanes Oxley Act are met by ensuring real-time information, which go to the guidelines generally accepted accounting principles, the full financial details are to be found on all transactions not included in the balance sheet. The purpose of the Sarbanes Oxley Act, also met with expanded visual financial and non-financial measures in effect in each company. Similarly, the official certification of these internal controls and financial measures also helps fulfill the purpose of Sarbanes Oxley Act.

increased set of responsibilities delegated to the audit also help fulfill the purpose of Sarbanes Oxley Act. Similarly, to meet the requirements of the Sarbanes Oxley Act, public accountants put under increased surveillance by the Securities and Exchange Commission that the newly formed public company accounting MANAGEMENT control for this purpose. You can read more free advice on Sarbanes Oxley of

Company CEO and CFO

A number of measures relating to the company CEO and CFO as well as the company’s finances have been allocated to fulfill the purpose of Sarbanes Oxley Act purpose. The company CEO and CFO would have to officially certify financial reports and data related to internal control. Similarly, insider trading should be regulated as loans to directors and managers, business involving the company securities must be registered in two working days and the CEO and CFO to be responsible for compensation to the company if the misconduct of the leading companies in trouble.

The purpose of the Sarbanes Oxley Act was to protect investors from the possibility of fraudulent accounting activities by corporations. The company can send Sarbanes Oxley software solutions to ensure compliance. To bring such transparency, the law must be changed periodically by Congress so that it meets the requirements of the hour.


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