A Guide to the New Language of Accounting and Finance

S

Sarbanes-Oxley Act (SOX) is a law the U.S. Congress passed on July 30, 2002 to help protect investors from fraudulent financial reporting by corporations. Also known as the SOX Act of 2002 and the Corporate Responsibility Act of 2002, it mandated strict reforms to existing securities regulations and imposed tough new penalties on lawbreakers. The Act came in response to financial scandals in the early 2000s involving publicly traded companies such as Enron Corporation, Tyco International, and WorldCom. The high-profile frauds shook investor confidence in the trustworthiness and credibility of corporate financial statements and led many to demand an overhaul of decades-old regulatory standards. Understandably, the Act attracted substantial comment ...