The Sarbanes-Oxley Act was created to protect investors by improving the accuracy and reliability of corporate disclosures. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure.
Officially titled the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or Sarbox, it was signed into law on July 30, 2002 by President Bush. It was designed to review the dated legislative audit requirements, and is considered the most significant change to United States securities laws since the New Deal in the 1930s.
The act came in the wake of a series of corporate financial scandals, including those affecting Enron, Tyco International, and WorldCom (now MCI). The law is named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH). It was approved by the House by a vote of 423-3 and by the Senate 99-0.
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