Sox

 

SOX is short for the Sarbanes-Oxley Act. This was passed into law in July 30, 2002. It was supposed to control the possibility of another Enron. It does not have any leeway for small businesses. This law affects every business, big and small.

            When the SOX Act was passed both houses put aside their politics and worked together in a manner that was remarkable like the U.S. Patriot Act. They probably felt the pressure of a public that needed reassurance. This makes me wonder why they have not worked in the same way with this down swing in the country’s economy. (Weytok, 2008)

            Enron really shocked the public. This law placed internal controls into place to nip any chance of another con job in the bud. By keeping different responsibilities separate, the chances of the left hand not knowing what the right was doing has dropped to slim and none. Audit companies must remain separate from consulting companies. It does this by putting in three requirements; 1) annual reports that must be thorough, 2) the reports must contain an assessment of how the controls are working, 3) auditors must review the report. (Katz, 2003)

            This law affects every publically traded company. So size does not matter, only if it is a public or private company. It is more likely that a private company will be small, but that is not necessarily true. Nor is it true that big companies are always publically traded. However before SOX, not all securities offerings were registered with SEC.

            So now all companies must decide if they want to remain private, and this usually means growing slowly, or being traded publically. This allows more people to invest in the company and allowing them to grow quickly.

References

Katz, D. M. (2003, August 1). Custom-Tailored SOX. Retrieved March 16, 2010, from CFO.com: cfo.com/printable/article.cfm/3010011

Weytok, J. G. (2008). Sorbanes-Oxley Overview for Dummies. Retrieved March 16, 2010, from Taking a Look at a Sarbanes-Oxely Overview- for Dummies: dummies.com/how-to/content/taking-a-look-at-a-sarbanesoxley-overview.html

 Here is my litmus test. I feel that this paper is the worst of all of the papers I have written. I really did not understand the class. However it was mandatory. If this paper does well, I will post more. I really want to write more fiction. But I am writing so many papers that I have to be satisfied with just my poetry right now.