Categories of the Sarbanes-Oxley Act of 2002

Categories of the Sarbanes-Oxley Act of 2002
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Categories of the Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 is an American statute that prioritizes assuring the best in the business sector. After significant accounting malpractice cases involving significant businesses like WorldCom, Enron, and Arthur Anderson, the federal security statute became necessary in the U.S. Corporate accounting and governance are governed by the Act of 2002's regulations (Kovanicová, 2019). It specifies formal penalties for businesses and people that engage in corruption or fraud. In addition, the Sarbanes-Oxley Act deters ethical business conduct by penalizing violators and protecting stakeholders, consumers, and staff (Westlaw, 2021). Various sections in the Act address anything from unlawful conduct to requirements for company boards (Mathews, 2021). The study highlights categories of the Sarbanes-Oxley Act of 2002 enacted by the U.S. Constitution.
Title I: Public Company Accounting Oversight Board
The public company accounting oversight board imposes the duties of overseeing and auditing public companies under Title I. The supervision board establishes regulations and guidelines for auditing and monitoring their application (Mathews, 2021). The accounting board also oversees independent auditing companies and follows auditing regulations.
Title II: Auditor Independence
The Act aims to reduce an independent auditor's conflict of interest. The Title discusses the necessity for new auditor authorization, the changing of audit partners, and the limitations on auditor reports. Additionally, the Title prohibits accounting firms from providing non-audit services like consulting.
Title III: Corporate Responsibility
All top managers are required under this provision to verify the correctness and comprehensiveness of financial reports. To guarantee the correctness of the company financial reports, it also discusses the conduct and relationships of independent auditors, company audit staff, and company executives.
Title IV: Enhanced Financial Disclosures
The subsections help improve company disclosure in financial statements, including Pro-forma records, financial records that do not appear on the balance sheet, and stock reports. All ...