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Revamping the Sarbanes-Oxley Act (SOX)" Please respond to the following:
We know that the Sarbanes-Oxley Act was created as the result of several high-profile fraud cases. Now that the act is over 10 years old, many think that it needs to be updated to reflect the changing times.
From the e-Activity, identify and discuss at least three changes that should be made to the act, indicating why these changes are necessary.
Create an argument supporting three items in the act that you would not change
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The Sarbanes-Oxley Act, better known as SOX, was passed in 2002 by the U.S. government in order to effectively protect the interest of the shareholders and the public at large from accounting errors and fraudulent practices by companies and also aims at improving and careful monitoring of various corporate disclosures. The act is administered by the SEC (Securities & Exchange Commission) which is entrusted with the responsibility of setting deadlines and ensuring proper compliance of publishing requirements for companies
The act came into effect after series of high profile accounting/auditing fraud cases and has been highly effective since its implementation. However, the act is more than 10 years old now and I believe that there should be a few changes in order to ensure its effective continuity. Below are some of the key suggested changes:-
(i) Executive disclosure requirements: The current regulation doesn’t require the company executives to disclose the perks received by them. I feel a more granular reporting requirement would ensure greater transparency and limit the unwanted use of company’s resources for personal benefits.