Choose a federal law Research Paper Example | Topics and Well Written Essays - 3750 words

Choose a federal law - Research Paper Example This policy paper will identify the history of the Act; trace its implementation, its impact on business and society as well as its strengths and weaknesses. Additionally, the paper will provide some recommendations for future policy makers. The legislation which came to force in 2002, has 11 major elements. The key provisions that this paper will analyze their implementation include Sarbanes-Oxley Sections 302, 303, 401, 404, 802, 906 and 1106. Sarbanes- Oxley was named after its sponsors Paul Sarbanes and Michael Oxley who were US Senators and Representative respectively. With the implementation of SOX, it became mandatory for top managements to personally certify the accuracy of the information that is provided by their organizations. Between 2000 and 2002, large corporate frauds occurred in various firms due to variety of complex factors. In addition to Worldcom, and Enron as noted earlier, other frauds included Adelphia, Tyco International, and Peregrine Systems. Apart from the conflict of interest that emanated from the frauds, they also resulted into problems during the incentive compensations practices. Through the analysis of the infamous frauds, the pioneers attained the ground for the introduction of the bill leading to the passage of SOX in 2002. According to Senator Paul Sarbanes, the market had problems that resulted to loss of hundreds and trillions of billions in dollars. Some of the notable issues that led to the mega frauds included lack of independence for the auditors, inadequate accountant’s oversight, conflict of interest on the part of stock analysts, weak corporate government procedures, ineffective disclosure procedures and providing low funds to the Securities and Exchange Commission. Before the introduction of SOX, auditing firms which are noted as watchdogs for the investors did not perform auditing or any consulting