This website uses cookies to ensure you have the best experience. Learn more

Sarbanes Oxley Advantages And Disadvantages Essay

867 words - 4 pages

Executive Summary
Companies’ financial reporting has been analyzed continuously by legislation. U.S Securities and Exchange Commission has the solution to ensuring integrity and protection from companies when reporting their financial statements. SEC’s mission is add order, ethics and efficiency in the financial markets. To provide protection to shareholders and investors, the Sarbanes-Oxley Act was passed in 2002 by congress. The act was passed as a reaction to fraudulent activities by some renowned U.S Corporations such as WorldCom, Tyco, and Enron. Before SOX was in place, there were two accounting rules that were in place for public accounting firms. The two rules are the GAAP, which is ...view middle of the document...

Experts have agreed that this is one of the “most reaching laws since the Securities and Exchange Act of 1934” (Jahmani and Dowling, 2008, p. 56). The main advantages of SOX are restoring investor confidence in the capital markets that were shattered by several financial catastrophes; by instilling transparency and ensuring accuracy of companies’ financial reports (Snee, 2007). Another advantage is the Section 906 of the act, which obligates that all CEO’s and CFO’s of public companies sign off on the company’s financial reports which increased responsibility amid executives. The act also clarifies the relationships of public companies and auditing firms and enhanced internal control. Finally, the SOX shield “whistleblowers” from discrimination of employers’ and increased penalties for SEC violations.
Despite the fact that stockholders’ confidence has increased due to SOX, many concerns has also been raised by numerous companies, especially small organizations. Kamar, Karaca-Mandic & Talley,(2007) argues that, research shows that SOX has increased public companies’ accounting expenditure. The authors note that before SOX was in place, audit costs had already comprised a higher portion of revenue for smaller organizations. They add that the difference between small and large companies amplified after SOX, specifically for small firms that complied with Section 404 of the Act. SOX have also had an enormous influence of small firms’ decision to go public (Kamar, Karaca-Mandic & Talley, 2007). Those opposed to SOX agree that small businessed are going to be the ones significantly impacted. They believe that the law was passed...

Other Essays Like Sarbanes Oxley-Advantages and Disadvantages

Advantages and Disadvantages of Using Mobile Phones

532 words - 3 pages , taking photographs and videos, playing games and many more things. But, we can understand that these mobile phones have advantages as well as disadvantages. Let us discuss about advantages and disadvantages of using mobile phones. When we think about mobile phones we can communicate with others wherever we are. If necessary, we can ask someone for helps whenever we need in a minute. We know that mobile phones are very useful thing in an urgent

Advantages And Disadvantages Of Dubai Museum

2060 words - 9 pages The Advantages and Disadvantages of the Dubai Museum Location and Implication of Visiting PatternsWord Count:1500 SummaryResearch was conducted through distributing questionnaires to the visitors of the Dubai museum. The findings illustrated that the advantages of the location showed that it was easy to locate, and is located near the metro station. However, findings have also showed that the parking spaces at the Dubai museum are limited and

The Advantages and Disadvantages of Computers

397 words - 2 pages not only serve our purposes of studying,relaxing but it also do us no good including hardening us to other's feeling and demoralizing our children's minds.However ,their advantages outstrip their disadvantages , therefore i realy think that computers are a vital device in this day and age.After all, whether computers are useful or not entirely depends on the way they afe used.

Advantages And Disadvantages Of Aquring SOE

1687 words - 7 pages C. Advantages and disadvantages of acquiring SOEs When a manager is assessing profitability of acquiring a state owned enterprise, it is crucial to identify the advantages and disadvantages. By doing this, the company will be able to make effective and strategic decisions, especially when entering a company in the volatile MENA region. Several driving factors may serve as incentives for managers, which include the fact that acquisition could be

Advantages and Disadvantages of Work Based Learning

2749 words - 11 pages Advantages and disadvantages of work based learning Introduction Education is one of the corner stone’s for social improvement, the form the education comes in, varies from the high achiever in the academic world that leads to a university education. Next in line to that is those who attained grades that will get them accepted to a college for further education that will lead to a specific qualification in an industry of their choice with

Strengthening Corporate Accountability and Responsibility with Sarbanes-Oxley Act and Coso

1105 words - 5 pages Strengthening Corporate Accountability and Responsibility with Sarbanes-Oxley Act and COSO Enron, Arthur Andersen, WorldCom. What does these companies and others have in common? They involved audit and corporate governance failures, resulting in the erosion of public confidence. Because of these high-profile corporate and accounting scandals, Congress passed the Public Company Accounting Reform and Investor Protection Act, commonly known

Advantages And Disadvantages Of Cohort And Case-Cotrol Studies

624 words - 3 pages Certain advantages and disadvantages exist for each of the various study designs. Compare and contrast the advantages and disadvantages of case control and cohort study designs (15 marks). Comment: In this case, we give advantages and disadvantages of cohort and case control study designs and offer a summary table to bring out their strengths and shortcomings. Cohort studies Advantages 1. Allow complete information on the subject’s exposure

Advantages and Disadvantages of Small and Large Businesses

809 words - 4 pages of small businesses: 1)can be managed and controlled by the owner. Often able to adapt quickly to a customer’s needs. Offers personal services to customers. Find it easier to know each worker. Disadvantages of small business: they have limited access to sources of finance May find the owner carries a large burden of responsibilities if unable to afford special managers. May not be diversified so there is greater risk of negative impact

ADVANTAGES AND DISADVANTAGES OF USING COMPUTER NETWORK TECHNOLOGY IN LANGUAGE TEACHING

2262 words - 10 pages ADVANTAGES AND DISADVANTAGES OF USING COMPUTER NETWORK TECHNOLOGY IN LANGUAGE TEACHING By Huynh Thi Bich Ngoc, M.A. in TESOL, The University of Queensland, Australia Over the past few years, together with magnificent technological advances, computer network technology is now exerting its influence on various aspects of life including government, business, economics, and undoubtedly, education as well. Under such a circumstance, there has

Cities: Advantages And Disadvantages!

546 words - 3 pages City is expected to be a best place where everyone can reach such better living conditions. Many people have been moving from their hometown in the countryside to start finding a chance in a big city. One of its advantages is that the city gives out many good conditions and environment for education, especially for youth. Moreover, there are great numbers of employment offered widely to everybody. However, pollution in big cities is such

Discuss the Relative Advantages and Disadvantages of Sole Proprietorship, Partnerships and Companies in the Carrying Out of Business

1538 words - 7 pages Table of Content QUESTION Discuss the relative legal Advantages and Disadvantages of Sole Proprietorships, Partnerships and Companies in carrying out business? Sole Proprietorships * Advantages * Disadvantages Partnerships * Advantages * Disadvantages Companies * Advantages * Disadvantages Sole Proprietorships The sole proprietorship is a business which is owned and operated by one person. To

Related Papers

Advantages And Disadvantages Of Working Essay

837 words - 4 pages Advantages and Disadvantages of Working If there is one principle that can be used to describe the existence of the species on the planet, it is that all creatures must work in order to live. Even before the beginning of recorded time, man organized himself into groups to forage, hunt, and later develop agricultural communities where the bulk of each day was spent pursuing or growing food and procuring or building equally essential shelter

Some Advantages And Disadvantages Of Internet

1452 words - 6 pages Some advantages and disadvantages of internet [pic] Availability of Knowledge Advantages The internet which was once just a little puddle, now, have become an ocean; an ocean of knowledge. It is like a magical crystal ball which has an answer for every question of yours and the best thing about it is; it is completely free. I know how much I have learnt from the internet. How internet is better than books when it comes to knowledge

Advantages And Disadvantages Of Using Facebook

1914 words - 8 pages importance of this study is to give knowledge to people about the advantages and disadvantages in using this social networking website which is Facebook. To give precautionary measures on how to be safe in using Facebook and to protect the people about the bad effects of using Facebook. Objectives of the Study General Objective: • To determine the advantages and disadvantages of using Facebook Specific objective: • To let people recognize

Advantages And Disadvantages Of Studying Abroad 2

525 words - 3 pages Advantages and Disadvantages of studying abroad Nowadays, there are many people continue their studies outside their country. They think that educations in other countries are better than in their own country. In my country, many students continuing their studies overseas. Australia, Singapore, China and USA are the most favorite countries to study. In my opinion, studying abroad is a good choice but there are many advantages and