Sarbanes-Oxley and Corporate Governance Paper

                                                        Sarbanes-Oxley and Corporate Governance Paper

                                                                                  Kwame Ireland

                                                                                        ETH/321

                                                                                 August 08, 2016

                                                                         Professor Miriam Gold

                                              Sarbanes-Oxley and Corporate Governance

        During the late 1990’s and early 2000’s, corporate scandals in the United States have taken a turn for the worst. Corporate corruption, scandals and unethical accounting practices by managerial staff and executives within several corporations became a concern for some members of the United States Congress. In an attempt to renew the public’s confidence in corporate financial reporting by focusing on the improvement of corporate governance practices, United States President George W. Bush, on July 30, 2002, signed The Sarbanes – Oxley Act of 2002 (SOX) into law. The Act “mandated some reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud" (SEC.gov. 2013 P. 1) and it (The Sarbanes-Oxley Act) also “created the Public Company Accounting Oversight Board (PCAOB) in response to numerous failures of the profession to fulfill its trusted role; to oversee the activities of the auditing profession” (SEC.gov, 2013).

                                                       Regulation and Compliance

        When the United States Government signed the Sarbanes-Oxley Act into law in 2002, it was exclusively geared toward protecting shareholders from fraudulent representations in corporate financial statements and bad accounting practices. It was with this understanding that The Public Company Accounting Oversight Board (PCAOB) was setup to oversee the audits of public companies and other issuers in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports. With the PCAOB as the watchdog for the federal government, each business operating within the United States and, foreign businesses doing business with United States based companies, are required to establish internal auditing systems and related attestation, quality control, ethics, training and independence standards form of accounting practices for the PCAOB to audit at any time. Companies and businesses are required to straightly adhere to these, as well as, the eleven titles that The Sarbanes-Oxley Act is divided into to be considered compliant or the business or/and could be penalized.