Pros And Cons Of The Sarbanes-Oxley Act

850 Words4 Pages
Introduction The Sarbanes-Oxley Act was signed in 2002 by President George W. Bush. This act came into placed when large corporate companies such as Enron, WorldCom and Tyco committed fraud in between 2000 through 2002. The practices inside of the company such as insufficient oversight of accountants, lack of auditor independence weak corporate control procedure and etc. This was put in place to reduce fraud, improving the reliability of financial reporting and restoring the investor confidence. The paper will examine tax advantages and disadvantages of the Sarbanes Oxley Act of 2002 while incorporating fraud prevention and small business. In 2002 this changed how business practices in order to protect the investors. In 1934 the Securities and Exchange Commission was created to police the U.S, financial markets. When the Sarbanes-Oxley Act of 2002 was formed it created the Public Company…show more content…
Since the ac has been put in placed it has been a burden to many companies. The tax department in many companies wants to ensure that they have the best practices and controls in place to eliminate any material weakness issues. Auditing companies are noticing that companies’ tax departments are very knowledgeable when it comes to technical tax topics but are weak when it comes to income taxes under SFAS 109. Many audit tax teams usually help with the SFAS 109 calculation due to independence issue and staffing storage tax departments are left with this issue. In order for the tax departments to improve controls over SFAS 109 they must ensure that they are processes available to avoid the material weakness in the tax area. There are some audit companies with the lack of knowledge in approving tax services (Thomas & Lifson, 2003). The tax department should assist them with the proper information in making an informed
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