Benefits To The Sarbanes Oxley Act

The Sarbanes Oxley Act was passed in an effort to enhance the quality of monetary reporting of companies and in turn addition investor confidence. The act obligates companies not only to openly share information about know risks, but also sets up the expectation that they will gull a rigorous process in place for discovering unknown risks. The Sarbanes Oxley Act is not only beneficial to investors but companies as well. Companies that are in compliance with the Sarbanes Oxley Act benefit from an subjoin in the quality of internal control structure, improved monetary reporting, ability to prevent and detect fraud, increased ability to bear capital and investor confidence.
Cost compliance has been the major issue in dealing with the Sarbanes Oxley Act. The 2007 reforms to Sarbanes Oxley and approval of the Public Company Accounting watchfulness Board were made to directly address those issues. Smaller companies hold up a larger cost based on political party worth but bigger companies see larger cost based on revenue. The sensed net benefits of Sarbanes Oxley compliance increase significantly with the size of the company, becoming less negative as the public float increases.



This is consistent with the finding that Section 404 of Sarbanes Oxley costs, measure by the companys assets, on one turn decrease significantly as company size increases, and that the perceived benefits of Section 404 compliance increase significantly with company size, on the other. The average perceived net benefits of Section 404 compliance in the first fiscal year following the 2007 reforms is higher coitus to the prior year. This holds across all size groups, significantly so for medium and large companies. Aside from the cost, Sarbanes Oxley Act compliant companies impart seen improved results in investor confidence, reliability of financial statements, and fraud prevention.
An measurable benefit to investors from the Sarbanes Oxley Act is corporate transparency. The more accurately...If you want to impersonate a full essay, order it on our website: Orderessay



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