The Sarbanes-Oxley Act of 2002 was an act that had huge implications on how business operate today. It was introduced as a solution to accounting fraud. This was because during this time period, it had recently been discovered that several large, influential, and seemingly profitable corporations such as Enron and Worldcom had in fact been committing fraud, and this ended up costing stockholders badly. Some of the provisions that the Sarbanes-Oxley Act put into place to prevent these kinds of accounting scandals from happening again are the creation of the Public Company Accounting Oversight Board, requiring external auditors to report directly to the audit committee, requiring more transparency of companies in their financial statements, and more severe penalties for cases of fraud.

The provision that I personally believe is the most important is the creation of the Public Company Accounting Oversight Board. This is because it is an independent source that is overseeing companies throughout the nation to ensure that fraud does not occur. Also, this allows the government itself to have more clarity on the financial situations of companies.

• PCAOB: Driving Continuous Improvement in Audit Quality. Default, pcaobus.org/.

What do you think of this discussion ?