What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act (SOX) is a federal law that tightened regulations on the financial management of publicly traded companies in the United States. The law was enacted in 2002 in response to a series of high-profile corporate scandals, such as the Enron scandal. The main purpose of SOX was to improve accuracy and transparency in financial reporting among public companies. In particular, SOX outlines changes that make it easier to detect and prevent fraud and unethical behavior by company executives. It requires corporate executives to certify the accuracy of their financial reports, and it significantly increases the penalties for violations. The law also created the Public Company Accounting Oversight Board (PCAOB), a government-run board that regulates the accounting practices of publicly traded companies. In New York, SOX applies to all companies based in the state, regardless of whether or not they are publicly traded. Companies based in New York must comply with the rules outlined in SOX, in order to remain compliant with state and federal regulations. Overall, SOX is an important law that has helped to improve transparency and accuracy in the financial reporting of publicly traded companies. It has been successful in reducing corporate fraud and unethical behavior, and has helped to create a more stable business environment for investors.

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What is the Sarbanes-Oxley Act?

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