Sarbanes-oxley act 2002 Essay Example | Topics and Well Written Essays - 500 words

Sarbanes-oxley act 2002 - Essay Example As a result of this the U.S Congress issued an act which was later known as the Sarbanes Oxley Act of 2002. The act addresses many different issues and is mandatory upon every public organization to follow (within the United States of America). The act consists of 11 sections which range from the extra duty being enforced upon different company boards to different criminal penalties if the guidelines of the Sarbanes Oxley Act are not followed. Besides such sections, the act wants the Securities and Exchange Commission to ensure that such guidelines and rules are followed by all the respective companies or not. The act focuses on issues such as corporate governance, internal control assessment, auditor assessment, etc. The act created a Public Company Accounting oversight board which was made responsible to manage and supervise audit companies which act as auditors of different public companies. Sarbanes Oxley Act 2002 is more of a Rules-Based approach where non-compliance would lead to heavy penalties (including some criminal prosecution as well). It is a requirement under the US stock exchange regulation to comply with SOX and a publicly held company needs to follow the act (private companies are exempt from its application).