Question

The Sarbanes-Oxley Act, $2002$ was enacted and passed in USA to _________.

• A. punish those who committed accounting frauds in the late $1990s$
• B. improve corporate profits
• C. help laid-off employees get their jobs back
• D. help restore confidence in corporate America

Answer 1

Answer: (A)

punish those who committed accounting frauds in the late $1990s$

The U.S. Congress passed the Sarbanes-Oxley Act $2002$, also known as the Corporate Responsibility Act of $2002$, mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud.

$SOX$ protects employees that report fraud and testify in court against their employers. Companies are not allowed to change the terms and conditions of their employment. They can't reprimand, fire, or blacklist the employee. $SOX$ also protects contractors. Whistle blowers can report any corporate retaliation to the $SEC.$