In this assignment, you will assess the pros and cons of the Sarbanes-Oxley Act of 2002.criticism of...

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In this assignment, you will assess the pros and cons of the Sarbanes-Oxley Act of 2002.criticism of sarbanes-oxley act 2002 do not believe the act will be effective at deterring accounting frauds because it primarily relies on specifying new crimes and higher penalties( increasing the maximum fine and prison terms). Critics argue that if corporate executives are not deterred by the prospect of 5 or 10 years in prison (pre-Sarbanes penalties), the threat of imprisonment will have little or no practical effect no matter what the maximum is raised to. Thus, critics conclude that the Act was more of an expression of political outrage than good policy. Proponents of the Act believe the new crimes, increased penalties, and the other provisions in the Act will be effective at significantly reducing corporate accounting frauds.Required: Provide arguments for both sides of the debate and formulate your own opinion.
	
Document Preview: In this assignment you will assess the pros and cons of the Sarbanes-Oxley Act of 2002. criticism of sarbanes-oxley act 2002 do not believe the act will be effective at deterring accounting frauds because it primarily relies on specifying new crimes and higher penalties( increasing the maximum fine and prison terms). Critics argue that if corporate executives are not deterred by the prospect of 5 or 10 years in prison (pre-Sarbanes penalties), the threat of imprisonment will have little or no practical effect no matter what the maximum is raised to. Thus, critics conclude that the Act was more of an expression of political outrage than good policy. Proponents of the Act believe the new crimes, increased penalties, and the other provisions in the Act will be effective at significantly reducing corporate accounting frauds.Required: Provide arguments for both sides of the debate and formulate your own opinion.

Robert · Accepted Answer

QUESTION: 
Assess the pros and cons of the Sarbanes-Oxley Act of 2002.
SOLUTION: 
Sarbanes-Oxley Act of 2002 is the act passed by the Congress of United States in the year 2002 
with an intention to protect the investors from the possibility of fraudulent accounting acts which 
are conducted by corporations. The act made certain strict reforms which are to be compulsorily 
followed by the corporations so as to prevent the accounting fraud and improve the disclosure 
made by the corporations. The act was the result of the accounting scandals like Enron, Tyco, 
and WorldCom in the early years of 2000.

In this assignment, you will assess the pros and cons of the Sarbanes-Oxley Act of 2002. criticism of sarbanes-oxley act 2002 do not believe the act will be effective at deterring accounting frauds...

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