Sox Reaserch

In: Business and Management

Submitted By TMSchool
Words 3558
Pages 15
Sarbanes-Oxley Act of 2002
SE584: Forensic and Business Investigations Techniques
February 22, 2009

The passage of the Sarbanes-Oxley Act of 2002 (SOX) changed how accounting is practiced and how corporations handle their accounting departments, to include auditing and internal controls. Some of these changes are for better accountability and some are for governing the application of stricter rules. The accounting profession was dramatically affected by the events leading up to and after the passing of this law. In the days before SOX, there were many high valued fraudulent activities. The news was flooded with employees, managers, and executives who were committing fraud against their investors, their organizations, or both. Millions and billions of dollars were being lost. The acts that brought about SOX began many years before its inception but were especially prevalent during the dot-com boom. These company’s executives fraudulently reported increases in revenue dollars, bringing their net income up in order to keep pace with their growth projected by analysts. The collapse of these “fast and furious” companies did not mean the last of the major fraudulent activities by executives against organizations or their investors. The 1990s was a time that saw many changes affecting business. The Internet was beginning to open more to commercial use, no more was it just for academics and the government. The age of technology that had started in the 1960s truly took off. The turn of the century was laying the groundwork for the scandalous events that rocked the business world and brought the changes of today.

Our corporate history has been speckled with fraud schemes and swindlers alike. Corrupt organizations and their executives have been prevalent since the inception of the corporation. The stock market crash of 1929-1932 (Shilit, 2002, pg 235), which was…...

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