The Sarbanes-Oxley Act

The Sarbanes-Oxley act is an act which was initiated by the US congress in 2002, and signed by President George Bush. The purpose of the creation of such an act came after the fraudulent acts by Enron Company, and was to ensure that all private corporations provided permanent financial statements and audits which conform to the generally accepted accounting principles. The Sarbanes-Oxley act was initiated by the PCAOB, standing for the Public Company Accounting Oversight Board; this latter was formed by the SEC, standing for the Securities and Exchange Commission. For further understanding, the SEC is a public institution which gives the legal and the authoritative support to the Financial Accounting Standards Board, FASB; this latter has the official right to maintain, create, and edit generally accepted accounting principles. Those principles act like a frame, or a universal language which enables the financial and accounting sector to communicate and compete freely and fairly.