More on the Sarbanes-Oxley Act

Read this article that explains the basic principles of the Sarbanes Oxley Act, which was passed in response to a series of large accounting scandals. This will help you understand some of the rules which govern public companies you may work for or invest in.

Sarbanes–Oxley Act

The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations.

The act, also known as the "Public Company Accounting Reform and Investor Protection Act" (in the Senate) and "Corporate and Auditing Accountability, Responsibility, and Transparency Act" (in the House) and more commonly called Sarbanes–Oxley, Sarbox or SOX, contains eleven sections that place requirements on all U.S. public company boards of directors and management and public accounting firms. A number of provisions of the Act also apply to privately held companies, such as the willful destruction of evidence to impede a federal investigation.

The law was enacted as a reaction to a number of major corporate and accounting scandals, including Enron and WorldCom. The sections of the bill cover responsibilities of a public corporation's board of directors, add criminal penalties for certain misconduct, and require the Securities and Exchange Commission to create regulations to define how public corporations are to comply with the law.

Source: Wikipedia, https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act
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