Respuesta :
The Sarbanes-Oxley Act (or SOX Act) is the U.S Federal law was enacted as a result of the Enron and mci/WorldCom accounting scandals that helps protect investors by making corporate disclosures, accounting and auditing more reliable and accurate.
The Sarbanes-Oxley Act (SOX) was signed into law by President Bush on July 30, 2002, in response to the 2001 accounting scandals at Enron and WorldCom.
SOX, named after its sponsors, Senator Paul Sarbanes and Representative Michael Oxley, has four titles that regulate the financial disclosures of public companies and the accounting practices of publicly traded companies and their auditors, in addition to creating specific penalties for committing accounting fraud against shareholders.
The legislation strengthened criminal penalties for fraudulent financial reporting and provided for shareholder lawsuits against executives who commit fraud or violate federal securities laws.
The purpose of the act: The U.S. Federal law that became known as Sarbanes-Oxley resulted from the Enron and WorldCom accounting scandals that occurred in 2000 and 2002 respectively.
The act is made up of eleven sections of law and created new securities legislation with a focus on accuracy, reliability, and transparency within corporations' financial reports.
It also places more responsibility on corporations' auditors to make sure they are meeting their obligations.
- Section 302 – Criminal penalties: Section 302 criminalizes acts such as insider trading and securities fraud.
With respect to securities fraud, this section provides for a prison sentence of up to 10 years for willfully destroying records, altering documents, and making false statements in any matter within the jurisdiction of an agency of the United States or in any case filed under section 78y.
In connection with that prohibition, Section 302 also prohibits those individuals who are not directors but do manage a company's books and records from falsely certifying those documents.
- Section 802 – Corporate Responsibility for Financial Reports:
SEC. 802. ENFORCEMENT OF CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS.
(a) Section 13(b)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78m
(b)(2)) is amended by striking or willfully or recklessly fails to make a reasonable effort to determine whether the issuer is in compliance with any provision of this chapter and inserting fails to comply with any provision of this chapter.
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