Question

Congress hoped that the Sarbanes-Oxley Act of 2002 (SOX) reforms would prevent another Enron scandal. The main goal of SOX is to protect shareholders and investors from financial fraud. SOX increased corporate disclosure requirements. True or false?

Answer 1

Answer: True

Explanation:The Sarbanes-Oxley Act was passed in 2002 in reaction to fraudulent practices by companies including Enron. In addition to increasing corporate disclosure requirements, it enforces a sterner sentence for corporate fraud, protects whistle-blowers and created the Public Company Accounting Oversight Board (PCAOB) which ensures that corporations follow accounting standards.

The Sarbanes-Oxley Act is generally seen to have reduced fraudulent practices since it was passed.