Sox Key Main Aspects for a Regulatory Environment Essay Example for Free

Sox Key Main Aspects for a regulative Environment EssaySarbanes-Oxley title was passed in 2002 by former president George Bush. Essentially to combat the Enron crisis. The Sox Act basically has regulatory control and creates an enviroment that is looking out for the public. Ideally this regulatory environment protects the public from twaddle within corporations. Understanding, that while having this regulatory control at quantifys the Sox requirements need to be tweaked or amended. not only now but in the future as well. The main aspects of the Sox operate argon essentially looking out for our welfare as a consumer. Our government has the obligation to regulate and facilitate every rules to enforce with a corporation to protect the Ameri clear people.The Sarbanes-Oxley Act of 2002 came into its own in the summer of 2002. The displace got its name from Senator Paul Sarbanes and Representative Michael Oxley. Essentially these two gentlemen were the founding fathers of this act. They set up the framework for complaisance and regulatory controls. The Sox is formatted with 11 different titles, however for compliance regulations there are six important sections. These sections are 302,401,404,409,802, and 906. Each oneness of these is the backbone of the Sarbanes-Oxley Act.One section in particular is a mark division to hold corporations accountable that would be section 302 of the Sox act. Essentially making both the chief executive officer and CFO singularity off on all fiscal enumerations. This is huge for any company. The reason being it holds people accountable, which in any business is essential for its own sustainable success. If the CEO has to review every financial document and essentially is putting his career on the line and to avoid a jail term. Each financial document is going to be scrutinized by him before he signs off of the financials.Another important obligate of the six is section 401 of the Sox act. This act pertains to financi al disclosers, and to make sure each one of these are sinless and has no mistakes or errors. Essentially everything needs to be documented and accounted for. Basically another check and counterbalance to assure that the financials are do right and the people doing them are held accountable.Article 404 of the Sarbanes-Oxley act is another article that is a huge key in regulatory compliance. This article is defined as Assessment of inwrought controls. Essentially making companies or corporations publish information about their controls and procedures for financial reporting.Article 409 is another key component to the Sox act. This article is defined by Real Time Issuer disclosures. Essentially a company or corporation is required to disclose portent financial information to the public if there is a explosive change to their financial condition or something within the operational realm. Also when this is disclosed it has to be make in layman terms for everyone to understand. Ano ther key step in holding people accountable and regulating companies or corporations.The one article that everyone will pay attention too is section 802. This is the vicious penalty section. This section is defined by Criminal Penalties for altering documents. Essentially stating that any destruction, falsifying or hiding and not disclosing any financial information is punishable by a 20-year prison sentence, fines and various(a) penalties. Another step of answerability in relation to section 302 a CEO is subjected to these terms and does so willingly when he signs financial documents. Another check in the system is the accountant who is providing the CEO with these documents is also held accountable by a 10-year prison term. This is great for accountability within an organization.Now the question would be for the future can the Sarbanes-Oxley Act work? And what are the ramifications in a long projection? In some ways I feel this act could be sustainable in a long-term scope to keep companiesand corporations in check. However I think this was created after the Enron situation and purely done because of that. Our government instead of being proactive was reactive and came up with this act for pure necessity and dismay and public outcry. However even if thats the case, this did at least set a framework and accountability for companies and corporations. Going forward this has worked for at least 10 years or so, however it should ratified to more current times and situations.Clayton Brite tends to agree with me When looking back upon the first ten years of the Sarbanes-Oxley Act, one can only conclude that it has placed an undue burden our public companies and stifled our economic growth. The Acts costs have greatly outweighed its benefits and thus needs reformed. Its effects have been perhaps more marked by the current financial crisis and the slow economic recovery. It is my opinion that lawmakers felt the pressure to punish integrated Americans when the y should have focused their attention on trying to reduce information asymmetry. Sarbanes-Oxley was written and passed within one month in 2002.With the empirical evidence we have now in its first decade of existence, it is time to go back and reform Sarbanes-Oxley and ease some of the burdens it has placed on companies which fall under its punitory purview, (Brite, 2013). So essentially I feel this act is not going away. I like the act and the fact people are held accountable for their actions. I like the sign off by the CEO and how they are held accountable as well. I think in some respects the Sox at should be modified and possibly have harsher penalties applied to assure that Enron will never happen again. We shall see travel forwardReferencesAddison-Hewitt Associates. (2006). A Guide To The Sarbanes-Oxley Act. Retrieved from http//www.soxlaw.com/Investopedia ,(2014). Sarbanes-Oxley Act of 2002-SOX. Retrieved from http//www.investopedia.com/Rouse, Margret. (2007). Definition of Sarbanes-Oxley Act. Retrieved from http//searchcio.techtarget.com/definition/Sarbanes-Oxley-ActBrite, Clayton. (2013). Is Sarbanes-Oxley A Failing Law? University of bread Undergraduate Law Review. Retrieved from http//uculr.com/articles/2013/6/30/is-sarbanes-oxley-a-failing-law