What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act is a set of federal laws passed in the United States that creates stricter rules for corporate governance and the accuracy of corporate financial information. This law was passed in response to a series of corporate scandals, such as the Enron scandal. The Sarbanes-Oxley Act required corporations to have more stringent rules for disclosure of financial information, internal control systems, and oversight and accountability of corporate boards. The goal of the act was to make sure that corporations were being honest and transparent in their financial reporting, and to prevent corporations from taking advantage of investors and the public at large. In Delaware, the Sarbanes-Oxley Act is applied to corporations within the state and is monitored and enforced by the Delaware Division of Corporations. The Division of Corporations also requires that all companies registered in Delaware file an annual report detailing the financial status of the company. This report must be filed with the Division of Corporations and is used to verify that the company is compliant with the Sarbanes-Oxley Act. Companies that fail to comply with the act can face penalties, including fines, or the possibility of being put out of business.

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What is the Sarbanes-Oxley Act?

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