The Reason behind Sarbanes- Oxley Act of 2002

The Sarbanes - Oxley act started when irregularities and unethical

practices are being seen in the large company in the U.S.

Paul Sarbanes, D-Md., and U.S. Rep. Michael Oxley, R-Ohio.

Are the ones who made the law about the restoring of the faith
of investors in the company. The act inspiration is when one of
the largest companies in America was seen having irregularities
and falsified business financial statements and found out that
this company is not the only one who is having unethical
practices in the accounting of the business. Therefore the goals
of this act are to give assurance to the investors their
investments will not be falsified. And ensures them to receive
reliable and accurate financial statements. This act was approved
and are implemented throughout America. There are some
allegations that this act is not helpful but investors are seen this
act as helpful. This aims to protect investors from inaccurate and
invalid financial statements.

The significance is that investors are having an assurance that

their investment will not going to waste. And ensures their
shares will be as accurate as it is.
 The Importance Of Sarbanes- Oxley Act of 2002 in
Present times

 The Sarbanes-Oxley Act of 2002 aims to protect investors from

accounting scandals and inaccurate financial reports.

 In contemporary we are surrounded by different businesses tangible

and intangible types. It is substantial to have the accuracy of financial
reports for businesses that will last longer and will not encounter
questionable net losses. The accuracy of financial statements brings to
the business the whole performance and the in and out of money of the
entity. If it will be falsified, the business may face a high risk of losses
and may cause bankruptcy. Investors may question and pull out
investments to the entity. The Sarbanes- Oxley Act ensures and
objectifies to protect and punish those accountants who will not do their
right ethics in the firm. It will be the guard for the financial reports and
pieces of information; it will serve as the assurance of investors that the
financial statements they are receiving are reliable and valid. Without
this Act, the company will be full of corruption and unethical behaviors.
Investors will be having a hard time investing. As well as a business
entity will face questionable problems with the financial performances
and rapid losses of profit.

 The assurance that the Act provides makes the investors secured and
are protected. It also makes the business too work on validity and
truthfully. It enhances the capacity of information to be accurate. The
reason for Sarbanes and Oxley made this Act is because they
experienced how falsified financial statement can damage the
companies’ decision and the trust ratings of the investors of the
company.