| The Sarbanes Oxley Act, passed by the U.S. House | | | | Commission) looks after the implementation of the |
| of Representatives in 2002, attempts to bring in | | | | Sarbanes Oxley Act. It always checks that the issuers |
| improved principles and accountability in the operations | | | | report and file records properly and timely. This activity |
| of companies in the U.S. It has been considered as a | | | | again prevents companies from misleading or |
| major comprehensive legislation in recent years in US | | | | inaccurate financial standing. |
| business security affairs. Non-compliance of the law | | | | Three important points of the SOX influence the |
| attracts major penalties on company boards. | | | | management of company records. The first point |
| The purpose of Sarbanes Oxley (also called SOX or | | | | restricts the destruction, alteration, and falsification of |
| SarbOx) is to keep away large businesses from | | | | records or documents. If a person attempts these |
| financial deception and misleading their investors and | | | | activities, he will face severe penalties and |
| shareholders. Basically this act is for protecting the | | | | imprisonment. Second point is that the businesses must |
| investors from public companies. It acts as a shield for | | | | follow a set of guidelines concerning communications |
| investors from losing their asset unfairly. The investors | | | | recording, audits, records etc. Though SarbOx Act |
| are also prevented from being misguided into investing | | | | keeps large corporations from fraudulent behavior, it |
| in business. | | | | has made certain accidental burdens on smaller |
| The Sarbanes Oxley Act contains eleven major | | | | businesses, making it difficult for them to grow and |
| sections, ranging from extra corporate board duties to | | | | flourish. Compliance with this act is not a heavy task. |
| punishment. SEC (Securities and Exchange | | | | |