| The House had passed the Oxley bill in April 2002, | | | | well. Moreover, it also helps in establishing a public |
| which was related to the accountability, responsibility | | | | company accounting oversight board, auditor |
| and transparency of stating financial status of the | | | | independence, and corporate responsibility and |
| company. At the same time Senator Paul Sarbanes | | | | enhanced financial disclosures. |
| had another proposal on the similar lines. He presented | | | | Most companies focus their attention on Sarbanes |
| the bill to the Senate Banking Committee which | | | | Oxley work in thirteen specific areas. These 13 areas |
| passed the bill with a majority. | | | | are the ones where most of the financial impact is felt. |
| Thereafter both the proposals made by House | | | | Section 404 stated in the Sarbanes Oxley act is the |
| Representative Oxley and Senator Paul Sarbanes | | | | ones that has caused the most concern in the financial |
| were reconciled to be formed in to one act, which is | | | | sector according to which requires the corporate body |
| now popularly known as the Sarbanes Oxley Act. | | | | to enhance stricter controls over the financial reporting |
| Sarbanes Oxley came into force mainly due to the | | | | by internal accounting personnel. |
| financial scandals committed by corporate giants like | | | | It has now become mandatory for companies to have |
| Enron, WorldCom, etc. Since then the Sarbanes Oxley | | | | Sarbanes Oxley compliance. The companies need to |
| act had been the most important piece of legislation | | | | meet Sarbanes Oxley compliance deadlines. The most |
| which seriously affects the corporate governance, | | | | important ones are that firstly, the companies should |
| financial disclosures and total accounting pattern in the | | | | meet the financial reporting and certifications mandates |
| companies. | | | | for statements filed after 15th November for any |
| After the Sarbanes Oxley act came into force, | | | | particular financial year. This deadline was amended |
| accounting system and financial statements disclosed | | | | from June 15th deadline stated earlier. Secondly, the |
| by the companies made tremendous progress. This | | | | Sarbanes Oxley compliance states that the smaller |
| improvement has been possible due to rigorous | | | | companies and foreign companies should meet the |
| requirements stated in the Sarbanes Oxley act. Due to | | | | mandates for statements filed after 15th July. This |
| this improvement it helps to protect investor | | | | deadline was amended from the earlier deadline of |
| confidence in the companies and the US legislature as | | | | April 15th. |