Sarbanes - Oxley Act , 2002

The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies.

Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. Auditors, accountants and corporate officers became accountable for the new set of rules. These rules were amendments and additions to several laws enforced by the Securities and Exchange Commission (SEC), including the Securities and Exchange Act of 1934 and the Investment Advisers Act of 1940. The SEC enforces the Sarbanes-Oxley Act. The main areas that the Act is focused on are:

Increasing criminal punishment
Accounting regulation
New protections
Corporate responsibility

The Act primarily sought to regulate financial reporting, internal audits and other business practices at publicly traded companies. However, some provisions apply to all enterprises, including private companies and nonprofit organizations.

Additionally, the Act established penalties for noncompliance with its provisions. Compliance with the Act is about financial disclosure and corporate governance.

Major provisions and further----

https://corporatefinanceinstitute.com/resources/knowledge/other/sarbanes-oxley-act/

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