The Sarbanes Oxley Act and its consequences

Exposé Entreprises & gestion Stratégie

Date de publication :

18/06/2008

Langue :

Français

Format :

.pdf

Nombre de pages :

82 pages

Niveau :

avancé

Consulté :

1 fois

Avis client :

non évalué

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Sommaire :

Sommaire

Presentation of Sarbanes Oxley: context and finality
1. Legal context
2. SOX, new obligations
3. Actors of SOX
4. The Step Sarbanes Oxley
Review of the SOX first year
1. General effect
2. Interpretation problems
3. Section 404: results of the first year of tests
From the installation to continuity
1. Situation
2. Making the SOX Act as an integral part of daily work
3. To align the reporting quarterly and annual
4. To anticipate the impact of the change
Impacts of SOX
1. The impact on the financial function
2. Impact on the boards of directors
3. Impact on the investors and the stock market
Prospects for SOX
1. To know the initial objective of Sarbanes Oxley
2. Analyze phenomenon of fraud and its detection by the audit
3. Lacks of Sarbanes Oxley
4. To go beyond SOX
5. To vigorously counter the attitude or the rationalization

Résumé :

Enron and WorldCom are just few examples of the accounting scandals of the last years, but they are emblematic. Firstly, everyone heard about those two firms and theirs scandals. All Medias specialized or not, talked about it, even books were written. Secondly, we have to note the blindness, or we could say the complicity of the auditor Arthur Andersen, who is supposed to be independent and impartial. Thirdly and more important, a large majority of the shares were owned by individuals who invested pensions and economies in those firms. They have lost every single dollar they invested because of the fraud. Many families were ruined. Those points conducts to an important question: how can investors still trust the financial statement of firms if they know that they can be false? How can they still invest their money on firms that can not be as healthy as it said and fill bankruptcy? How can individuals still put their money in firms? In fact, market generally and stock markets in particular strongly need investment. The consequences of an investor's loss of confidence can be disastrous. Firstly, investors will massively sell their shares. It will conduct to a fall in share's price and even to a fall of the stock market. Secondly, firms need money to create and promote new products, pay the employees to do some research and development... benefits only can not provide enough money to do this. If the money is not given, firms can fill bankruptcy and then, it will not be the firm's problem only, but also government. That is why the American government had to react. To counter this major crisis of confidence and fraudulent practices, the American State reacts by a major reinforcement of the regulation by the "Public Accounting Reform and Investor Protection act of 2002" or commonly called "sarbanes-oxley act", SOX or SOA. The law sarbanes-oxley brought the most important reform the American financial markets saw since the "Securities act" in 1933 and of "Securities Exchange act" in 1934.