What are the restrictions imposed by the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act is a law created to protect investors from fraudulent corporate accounting practices. The restrictions imposed by this Act are designed to make it more difficult for companies to manipulate or withhold information from investors. The Act requires two main parts: that corporations have more stringent financial controls and that corporate executives are held more responsible for the accuracy of their financial statements. To ensure financial controls, the Act requires external auditing of a company’s internal accounting methods, meaning an outside entity canthe external auditor must be contracted to review the accuracy of the accounting information. The Act also requires that corporate executives are held personally responsible for their actions, which means that they can be held legally and financially liable for any false or misleading financial information. In addition, the Act requires that corporate executives must not trade their company’s stock during certain periods of time and should not use insider information to make investments. The Sarbanes-Oxley Act also set stiffer record keeping and disclosure requirements for publicly-traded companies. This includes that companies must make public announcements outlining any financial transactions they make, as well as revealing the compensation packages of their top executives. Overall, the Sarbanes-Oxley Act is designed to help protect investors by increasing the accountability and transparency of corporate executives and corporations. It is also meant to help increase trust in financial markets and ensure that investors have access to accurate and reliable information.

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What are the restrictions imposed by the Sarbanes-Oxley Act?

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