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  • History of SOX Act-Baluyot, Dabalos

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    The Sarbanes-Oxley Act of 2002 (SOX) was passed in response to major corporate and accounting scandals to protect investors and improve accuracy/reliability of corporate disclosures. It regulates financial reporting, audits, and business practices of public companies. Major provisions establish the Public Company Accounting Oversight Board to regulate auditing and require management to assess internal controls. While some criticized increased costs, SOX benefited companies and investors by strengthening financial practices and increasing transparency and oversight. The Philippines adopted reforms to its auditing practices and corporate governance standards in response to SOX.

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    The Sarbanes-Oxley Act of 2002 (SOX) was passed in response to major corporate and accounting scandals to protect investors and improve accuracy/reliability of corporate disclosures. It regulates financial reporting, audits, and business practices of public companies. Major provisions establish the Public Company Accounting Oversight Board to regulate auditing and require management to assess internal controls. While some criticized increased costs, SOX benefited companies and investors by strengthening financial practices and increasing transparency and oversight. The Philippines adopted reforms to its auditing practices and corporate governance standards in response to SOX.

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    13 views11 pages

    History of SOX Act-Baluyot, Dabalos

    Uploaded by

    Ella Grace
    The Sarbanes-Oxley Act of 2002 (SOX) was passed in response to major corporate and accounting scandals to protect investors and improve accuracy/reliability of corporate disclosures. It regulates financial reporting, audits, and business practices of public companies. Major provisions establish the Public Company Accounting Oversight Board to regulate auditing and require management to assess internal controls. While some criticized increased costs, SOX benefited companies and investors by strengthening financial practices and increasing transparency and oversight. The Philippines adopted reforms to its auditing practices and corporate governance standards in response to SOX.

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    © All Rights Reserved
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    of 11

    SARBANES-OXLEY ACT

    OF 2002
    SOX
    ACC 120 Act of
    2002

    By: Kathleen Grace Baluyot & Keufill Dabalos


    (BSA 4-1)
    To Learn:
    History of Sarbanes-Oxley Act of 2002

    Major Provisions of Sarbanes-Oxley Act

    Criticisms of Sarbanes-Oxley Act

    Benefits of Sarbanes-Oxley Act

    Reforms Adopted by the Philippines

    2
    History of Sarbanes-Oxley Act of 2002
    Sarbanes-Oxley (SOX) Act of 2002

    An act to protect investors by improving the accuracy and reliability of


    corporate disclosures made pursuant to the securities laws, and for other
    purposes.

    The act primarily sought to regulate financial reporting, internal audits and
    other business practices at publicly traded companies. 

    3
    History of Sarbanes-Oxley Act of 2002
    Sarbanes-Oxley (SOX) Act of 2002
    It was enacted by the Senate and House of Representatives of the United
    States of America on July 30, 2002.
    It was named by the sponsors of the act: U.S. Sen. Paul S. Sarbanes and U.S.
    Rep. Michael G. Oxley.

    U.S. Sen. Paul S. U.S. Rep. Michael


    Sarbanes G. Oxley 4
    History of Sarbanes-Oxley Act of 2002
    Why did they created this act?

    In response to the large corporate scandals due to number of frauds.


    - Enron
    - WorldCom
    - Tyco International

    To restore investor confidence in the wake of high-profile cases of corporate


    crime.

    5
    Major Provisions of SOX Act
    Section 302 - Corporate
    For Public Enlisted Responsibility for Financial
    Companies Reports
    Section 404 - Management
    assessment of internal controls

    Sarbanes
    New requirements for
    -Oxley For Audit Firms
    corporate auditing practices
    Act

    Creation of the Public Company


    Accounting Oversight Board
    Creation of PCAOB (PCAOB), which sets standards
    and rules for audit reports.

    6
    Criticisms of Sarbanes-Oxley Act

    Many executives who felt they


    The law would hinder
    were unfairly burdened by
    competition and business
    new regulations due to the
    growth.
    dishonest and negligent acts

    Sarbanes-
    of a few others.

    Oxley Act of
     Low number of initial
    2002 Too much executive time and
    more additional cost for
    public offerings. compliance.

    7
    Benefits of Sarbanes-Oxley Act

    Better financial practices that would benefit companies and investors.

    Improve financial management by:


     strengthening controls
     standardizing processes
     improving documentation
     creating stronger board oversight.

    Increased investor confidence.


    8
    Reforms Adopted by the Philippines
    Sarbanes-Oxley Act Reforms Adopted in the Philippines

    1. Public Company Accounting Oversight The oversight of the audit profession by


    Board (PCAOB) Board of Accountancy (BOA)

    2. Auditor Independence Code of Ethics for CPAs and SEC


    Memorandum Circulars on Guidelines on
    Accreditation of Auditing Firms and
    External Auditors.
    3. Corporate Responsibility Code of Corporate Governance
    issued by SEC.
    4. Enhanced Financial Disclosure The SEC and PSE prescribe the “full
    9
    disclosure approach”; PAS 24
    References:

    • https://pcaobus.org/About/History/Documents/PDFs/Sarbanes_Oxley_Ac
    t_of_2002.pdf

    • https://www.techtarget.com/searchcio/definition/Sarbanes-Oxley-Act
    • Information Technology Auditing and Assurance by James A. Hall
    • AN ASSESSMENT OF CORPORATE GOVERNANCE REFORMS IN THE PHILIPPINES:
    2002 – 2009, Debbie C. Wong.

    10
    THANK YOU

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