Facts On Sarbanes Oxley Bill
The credit for the creation of the Sarbanes Oxley act of 2002 goes to Senator Paul Sarbanes (he thought of the idea) and the representative of the House (Mr. Oxley) who drafted the Sarbanes Oxley bill. The transparency, accountability and the responsibility related to the financial status of any company were all looked after by the bill. The bill was by a near cent per cent majority (99-0) in the House and became a law. The basic ideology behind the formulation of this concept was to safeguard the investors and share holders from possible debacles and money loss scenarios which might come forward as a result of the vast number of corporate scandals and scams. The Sarbanes Oxley bill takes care of all possible interests of the investors by ensuring the transparency between the various companies and their share holders, as a result of which the share holders knew the functioning of the company and got the various audits. The law consisted of 11 sections and each section had varied number of sub sections.
The act came into existence owing to the corporate scandals which surfaced on an extremely large scale. The scandals were committed by various major companies like WorldCom, Enron, and other similar firms. The act is considered the most important act of legislation of the decade gone by and has helped in re shaping the face of the economy of the United States of America and of the world in general. The Sarbanes Oxley bill which became a law later on details all possible aspects which an investor needs to know about the company in which he is investing and made sure that the correct information reaches the share holders and investors. The law affects the financial disclosures, the corporate governance and accounting patterns in totality of various companies and led to various advancements in the financial statements and accounting systems. This was made possible only by the requirements of the Sarbanes Oxley act of 2002.
The Sarbanes Oxley bill, which later became a law, safe guards the investors in general along with safe guarding the legislature of the United States. The law also established a public company which came to be known as the Public Company Accounting Oversight Board (abbreviated as PCAOB). Almost all companies have their attention focused on thirteen areas in particular of the Sarbanes Oxley act.
In the world today, it is a prime requisite for every company to comply and abide by the Sarbanes Oxley bill turned law. The factor which holds the highest importance is that all the companies should fulfill the certifications mandates and financial reporting before the 15th day of November for any financial year. The Sarbanes Oxley bill which was passed as a law has had major effects in facing the economy over the years. The law is considered as the most influential economic legislation over the past few years. The law keeps in mind the interests of both the investors and the various firms. Although the consideration, the act was widely hated by the various firms and companies, owing to the transparency which they had to exhibit in compliance to the law. The investors were the major beneficiaries of the law. They regained their faith and trust in the system to large extents and thus helped greatly in the growth of the economy.
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