What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act is a law passed in 2002 by the United States Congress in the wake of various corporate accounting scandals that had occurred in the previous years. It is designed to protect investors from fraudulent activities that can occur in corporations. The law sets out strict guidelines for how publicly-traded corporations must report their finances and establishes a board of trustees to oversee compliance. The Sarbanes-Oxley Act sets out requirements related to the accuracy and reliability of financial statements and corporate disclosure. It requires that all financial statements must be accurate and created in compliance with accepted and recognized accounting rules. It also requires that financial statements be regularly reviewed by auditors to ensure accuracy and compliance. The Act also requires that executives of a company certify the accuracy of the financial report. The law also set out penalties for unethical practices, such as insider trading, and provides whistleblower protection for employees who report corporate fraud. In Texas, the Sarbanes-Oxley Act applies to all publicly traded companies, as well as all companies with assets or securities registered with the Securities and Exchange Commission. Under the law, the Texas Secretary of State has the authority to make sure that companies in Texas comply with the Sarbanes-Oxley Act and any other applicable laws and regulations. Failure to comply with the law can result in severe fines, criminal charges, and even jail time.

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What is the Sarbanes-Oxley Act?

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