The Sarbanes Oxley Act Unexpected Benefits Essay

The Sarbanes-Oxley Act: Unexpected Benefits For just a brief moment, imagine yourself sometime in the future. You have been recently married, you just started a brand new job, and are looking to start a family. As a way to plan for financial security, you have done some research into financial investments. You are hoping to build a portfolio, which will be a mix of low, median, and high-risk stock. Flash forward into the future by 20 years. During this time, the stock prices have appreciated and depreciated, yet overall done remarkably well. All of a sudden, one morning you wake up to some disastrous news. One of the company’s you invested in, which held a majority of the portfolio of stock, has been participating in financial fraud. While they had been presenting themselves well, under the surface deceptive accounting and financial practices were being used and now the company is broke. All of your hard earned money which was invested in that company is now gone-down to the last penny. Does this sound vaguely familiar? It should. In 2001, Enron, a United States company, became the very largest bankruptcy and stock collapse in history (Columbia Electronic Encyclopedia). As a result, in 2002, The Sarbanes-Oxley Act was passed as means to prevent fraud, improve financial reporting, and gain back the trust that was previously lost by investors. Although numerous publicly traded companies, which are companies registered on the U.S. stock exchange, were less than happy to welcomeShow MoreRelatedThe Sarbanes Oxley Act ( Sox ) For A Company1461 Words   |  6 Pagesassignment I am going to try to describe the cost and benefits of implementing the Sarbanes Oxley Act (SOX) for a company. I will then move on to describe what it is, how to go about it, and what a company may need to properly implement it. The Sarbanes Oxley Act was approved and activated in 2002 to protect investors and to renew confidence in American companies from what happened with the fall of companies like Enron, HealthSouth, and WorldCom. This act was trusted to fix or find corruption in the companiesRead MoreThe Sarbanes Oxley Act ( Sox ) For A Company1280 Words   |  6 Pagesassignment I am going to try to describe the cost and benefits of implementing the Sarbanes Oxley Act (SOX) for a company. I will then move on to describe what it is, how to go about it, and what a company may need to properly implement it. The Sarbanes Oxley Act was approved and activated in 2002 to protect investors and to renew confidence in American companies from what happened with the fall of companies like Enron, HealthSouth, and WorldCom. This act was trusted to fix or find corruption in the companiesRead MoreLge 500 Week 10 Discussion 12 Essay2300 Words   |  10 PagesUnderlying Causes Please respond to the following: Analyze at least three underlying causes for the creation of the Sarbanes-Oxley Act. Next, rank the causes that you have analyzed from the most important to the least important to the creation of the Act. Explain your rationale. In the later part of 1990s, there was an epidemic of accounting scandals which arose with the disclosure of financials transgressions by trusted corporate executives. The misdeeds involved misusing or misdirectingRead MoreEssay on Independence Issue in Hih Case2665 Words   |  11 Pagesindependence are usually restrained and difficult to measure. 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