Three years after President Bush signed the Sarbanes-Oxley Act into law, the repercussions continue to resonate through the business community - with calls for reform, the explosion of compliance tools, and relief on the part of some shareholders.In the wake of the scandals at Enron, WorldCom and Arthur Andersen, Sarbanes-Oxley was created to improve the financial reporting systems of American companies subject to Securities and Exchange Commission reporting requirements.
In addition to establishing records-retention requirements for audit papers, the law created a new oversight board for accounting firms auditing publicly traded companies; addresses auditor independence; outlines corporate responsibility at publicly traded companies; affects the financial disclosures of publicly traded companies; and establishes reviews for conflicts of interests of financial analysts. The law also creates protections for "whistleblowers" that are applicable to private and public companies, and imposes new criminal penalties relating to fraud, conspiracy and interfering with investigations.
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