Sarbanes Oxley Act of 2004 Essay -- Investment Investor Sarbanes Oxley

Sarbanes Oxley Act of 2004 The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 by President Bush. The unfermented law came after major in bodilyd scandals involving Enron, Arthur Anderson, WorldCom. Its goals be to protect investors by improving accuracy of and reliability of merged disclosures and to restore investor confidence. The law is considered the most important change in securities and corporate law since the New Deal. The act is named after Senator Paul Sarbanes of Maryland and deterrent example Michael Oxley of Ohio (Wikipedia Online).Sarbanes-Oxley consisted of 11 different titles or sections. Title I is humanity connection Accounting Oversight advance. It created a five member panel cognize as the Public Comp any Accounting Oversight Board, overseen and appointed by the Securities and Exchange Commission (Sarbanes-Oxley). The Board is to consist of two CPAs and three populate that are not CPAs, but the chairman must be a CPA. The Board is to pr ovide oversight of auditing of public companies while establishing auditing, quality control, independence, honourable standards (Arens 32-33). Public accounting firms that work on audits must register with the Board and pay a fee. Title I also included new auditing rules. Auditors must now retain paper work for seven years, birth a second partner review and approval of audit reports, label whether internal controls accurately show transactions as well as sales of assets, and describe any weaknesses or noncompliant internal controls. Public accounting firms that issue auditing reports for more than 100 companies are to be inspected every(prenominal) year. Accounting firms that issue audit reports for less than 100 companies must be inspected very three years. The Board can discipline or countenance accounting firms for what it deems to be negligent conduct (Conference of State Bankers Online).Title II of the Sarbanes-Oxley Act is Auditor Independence. It creates new rules that attendees must abide by in order to keep their objectivity and accuracy. Auditors are now banned from perform most non-audit related services like bookkeeping, actuary services, and management consulting. An auditor may no longer be the lead auditor of a firm for more than five consecutive years. Auditors are now essential to report all significant accounting policies and practices used in the audit, any different trea... ... GE has said that new compliance costs are about $30 million. AIG has said that Sarbanes-Oxley is costing the company $300 million. umpteen European companies have also complained because they are forced to comply because they are on American stock exchanges. Surveys have also found that some companies are even thinking about going private to vitiate compliance Sarbanes-Oxley (Bartlett 1-3).Works CitedArens, Alvin, Randal Elder and Mark Beasley. Auditing and Assurance Services An interconnected Approach. Upper Saddle River, NJ Pearson Prentice Hall, 2005 .Bartlett, Bruce. The Crimes of Sarbanes-Oxley. National Review 25 May 2004.http//www.nationalreview.com/nrof_bartlett/bartlett200405250811.aspConference of State Bankers Online. Executive Summary of the Sarbanes-Oxley Act of 2002. 10 February 2005. http//www.csbs.org/government/legislative/misc/2002_sarbanes-oxley_summary.htmSarbanes-Oxley Act of 2002. 107 Cong., 2nd sess. 2004. http//frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=107_cong_ bills&docid=fh3763enr.tst.pdf.Sarbanes-Oxley Act. Wikipedia Online. http//en.wikipedia.org/wiki/Sarbanes-Oxley_Act.