Sarbanes-Oxley

Sarbanes–Oxley Act of 2002

Long title	An Act To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.
Nicknames	Sarbanes–Oxley, Sarbox, SOX
Enacted by	the 107th United States Congress
Citations
Public law	Pub.L. 107–204
Statutes at Large	116 Stat. 745
Codification
Acts amended	Securities Exchange Act of 1934, Securities Act of 1933, Employee Retirement Income Security Act of 1974, Investment Advisers Act of 1940, Title 18 of the United States Code, Title 28 of the United States Code
Titles amended	15, 18, 28, 29
Legislative history
Introduced in the House as "Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002" (H.R. 3763) by Mike Oxley (R-OH) on February 14, 2002 Committee consideration by House Financial Services, Senate Banking Passed the House on April 24, 2002 (334–90) Passed the Senate as the "Public Company Accounting Reform and Investor Protection Act of 2002" on July 15, 2002 (voice vote, in lieu of S. 2673 passed 97–0) Reported by the joint conference committee on July 24, 2002; agreed to by the House on July 25, 2002 (423–3) and by the Senate on July 25, 2002 (99–0) Signed into law by President George W. Bush on July 30, 2002

The Sarbanes–Oxley Act of 2002 (Pub.L. 107–204, 116 Stat. 745, enacted July 30, 2002), also known as the "Public Company Accounting Reform and Investor Protection Act" (in the Senate) and "Corporate and Auditing Accountability and Responsibility Act" (in the House) and more commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms. There are also a number of provisions of the Act that also apply to privately held companies, for example the willful destruction of evidence to impede a Federal investigation.

The bill, which contains eleven sections, 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, adds criminal penalties for certain misconduct, and required the Securities and Exchange Commission to create regulations to define how public corporations are to comply with the law.

In the year of 2002, Sarbanes–Oxley was named after sponsors U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH). As a result of SOX, top management must individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Also, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements.

...
Wikipedia