Regulatory Agency

                                      Regulatory Environment

                                                    Sarbanes-Oxley Act

  Darryl Williams

ACC/561

                                                         June 16, 2015

                                                     Dr. Johnnie Bejarno

Regulatory Environment

This paper will address the regulatory environment that was set up to protect the public from unethical behavior and fraud within a corporation. The regulatory agencies enforce rules and regulations by imposing supervision or oversight for the benefit of the public. These agencies implement laws enacted by the U.S. legislature that govern specific social or economic activities. In other words to ensure transparency of information and requires decision-makers to give reasons explaining their actions.  In the Senate, "The Sarbanes-Oxley Act" is called the "Public Company Accounting Reform and Investor Protection Act" and in Congress, the act is called "Corporate and Auditing Accountability Act." The Sarbanes-Oxley Act is a regulation "that protect investors by improving the accuracy and reliability of corporate financial disclosures". This paper will pay close attention to Sarbanes-Oxley Act (SOX) that was introduced after major corporate accounting scandals with some publicly traded companies.

On July 30, The President of the United States signs a bill aimed at Fraud In Corporations, due to recent accounting scandals with Enron and WorldCom,etc. "Mr. Bush Bluntly threatened, No more easy money for corporate criminals, just hard time." He called this legislation " the most far-reaching reforms of American business practices since the time of Franklin D Roosevelt"((Bumiller, 2002)

Franklin D. Roosevelt was the president of United States when the Securities Exchange Act was enacted."The Securities Exchange Act of 1933 is a law governing secondary trading of stocks, bonds, and debentures(securities) in the United States". The act has a wide-ranging legislation of regulation of the financial markets and their participants. The primary function of the "the Securities and Exchange Commission in 1934", is to enforce securities laws. The "Securities and Exchange Commission implement rulings on the requirements to comply with the law" and there are 11 titles under SOX. ("Sec.gov", n.d.)

Title I

The Public Company Accounting Oversight Board provides specific process and procedures for compliance audits, policies for control purpose. This board provides an oversight of public accounting firms that do auditing. (Congress.gov n.d.)

Title II

Auditor Independence provides standards for external auditors independence so that conflict of interest can be minimized. The requirements for appointing an auditor and auditor reporting requirements. In which auditing companies are prohibited from providing consulting for clients for whom they provide services. (Congress.gov n.d.)