Demonstrate an in-depth understanding of the legislation by explaining the background and all relevant facts.

A review for week eight of a particular bill

Sarbanes-Oxley Act was passed as a response to several high-profile scandals. It aims to safeguard investors by mandating that all public companies have internal control systems in place for reporting financial information and disclosing it. The legislation sets strict auditing requirements, and criminal penalties are imposed for violations of these controls or attempts to circumvent them. It also requires organizations to provide all information relevant to their financial activity so investors can make an informed decision.

The Sarbanes-Oxley Act applies to all organizations subject to the U.S. Securities Exchange Commission’s regulations, including publicly traded companies, brokers/dealers and investment advisors. Companies must adhere to various provisions including codes of ethics, prohibiting employer loans to employees, providing whistleblower protections and requiring executive officers’ certifications regarding financial reporting. In order to properly audit finances, the Act requires that firms maintain accurate records.

Sarbanes-Oxley Act, as a whole, is a very important legislation that aims to improve transparency in the business world and investor confidence through a reduction of fraud and unethical behavior. Its provisions are intended to ensure that publicly traded companies are held accountable for how they manage investors’ funds while minimizing potential losses due improper or fraudulent activities.