Pushkin Gupta
affiliation not provided to SSRN
Abstract:
Enron, WorldCom, and Tyco International are just a few examples of public companies involved in the biggest accounting scandals in the history of the United States. American investors expected CEOs and CFOs of these companies to be honest, and the auditors were expected to do their job sincerely and truthfully. The American investors also relied on the federal government to have rules and regulations to monitor their investments, and for multiple decades, the Security and Exchange Commission (SEC) kept American businesses honest. However, “unfortunately, the existing statutory scheme did not safeguard American investors from Enron, WorldCom and others.”
As a consequence, the US Congress passed the Sarbanes Oxley Act (SOX) (also known as Public Company Accounting Reform and Investor Protection Act) in 2002. Though Sarbanes Oxley has its benefits, it has also come under a lot of criticism. This paper attempts to review the benefits of the Sarbanes Oxley Act, its criticisms and the role it plays in ensuring higher ethical standards for publicly traded American businesses.
Keywords: SOX, Sarbanes Oxley,Critics,Section 404, Section 302,Title II,Title IV,Title III,Title VIII
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