The involvement of accounting professionals and management in accounting scandals resulted in congress passing the act. what is the purpose of the sarbanes-oxley act to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices.
A federal law known as the Sarbanes-Oxley Act (SOX) was passed in 2002 with backing from both political parties in Congress. Its goal was to enhance auditing and public disclosure in response to major accounting scandals in the early 2000s. The law is also known as SOX and was given that name by Senator Paul Sarbanes and Representative Michael Oxley, who sponsored it. Click here to access the statutory text: Pub.L. 107–204. Early in the new millennium, financial markets were rocked by accounting scandals at significant corporations, prompting Congress to strengthen investor protection. The stock price of Enron, which peaked at $90.75 in the fall of 2000, fell to $0.26 by the time the company filed for bankruptcy in 2002, making it one of the largest companies involved in such accounting scandals.
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