The Sarbanes-Oxley Act was created after the failures of the once respected businesses like

Enron and WorldCom. It was created to strengthen the consumers’ confidence in the capital

market. It achieved this by mandating top managers to personally certify the accuracy of

financial reports, established the Public Company Accounting Oversight Board, strengthened

disclosure requirements, required companies to perform internal control audits, and enacted

harsh penalties for committing fraud or knowingly submitting false statements. These changes

made committing fraud more difficult, gave better punishments for managers who let fraud

happen, and gave information to the consumers that allowed for their confidence to come back

after the disasters of previous businesses. It also created standardization of processes, improved

documentation, and forced businesses to consider about how to tighten internal controls. It has

been a largely successful act that has strengthened the responsibility and ethics of businesses and

managers. I has also changed the relationship between the company and the auditor. Finally, it

sparked the corporate responsibility movement that has caused behavioral changes that have

reduced the number of financial accounting scandals in past few years.