Sarbanes-Oxley Act (Sox) 2002: CEOs & CFOs

The Sox suffice in 2002 enhanced the responsibilities of the CEOs and CFOs by requiring them to acknowledge the accuracy of the pecuniary statements and making sure that there is no figure of fraudulence. Further to a greater extent, they could significant penalties such as that they could face up to 10 days for knowing violations and up to 20 years if willing as nearly as criminal charges for certifying false information. In addition, they will be veto from holding corporeal positions as directors or office in the future day by the SEC (Fordham International jurisprudence Journal, 2003). The main purpose tardily this is to make sure that all wrongdoing to the public investors will not go unpunished.Thus, the executives are placed in a position where they mustiness face-to-facely responsible for the financial statement. Furthermore, the certification by CEOs and CFOs require more time and diligence from all members of the friendship including auditors and senior acco unts to put more efforts into reviewing the financial statements. If in any case where misconduct activity is suspected, whence CEOs and CFOs can be forced to lose any bonuses or remuneration from selling company stock in one year result (NACUBO, 2003). Before the SOX Act, most CEOs and CFOs usually do not take personal responsibility for the financial statement so they simply just subscribe it instead of spending time to review it carefully (Maroney &McDevitt , 2008).With this act, they are demand to establish, maintain, and continuously monitoring as well as evaluating the intensity level of the companys financial disclosure and procedures. By certify the quarterly or annual report, CEOs and CFOs agreed to the accuracy and fair presentation of the report and fundamentally certify that they have reviewed the report to the best of their knowledge, does not contain any untrue statement or omit any important and infallible information such as financial data and statements (Ford ham International Law Journal, 2003). The overall goal of SOX Act is to restore the confidence in investors when reviewing its financial reports because there is really no point of looking at it if it is inaccurate.The Sarbanes-Oxley Act of 2002 Internal ControlThis section addresses the problems and weaknesses in intrinsic controls andhow public company methods to collect, process, and find financial information to satisfy its statutory reporting requirements. Recent corporate and accounting frauds have demonstrated the inadequacy of internal controls with regard to taxation recognition. The act also contains requirements aimed at ensuring proper revenue recognition (SEC, 2013). beneath this section, there must be a statement of managements responsibility for establishing and maintaining internal control for any financial report of the company.Furthermore, they must list out the frameworks on how they used to determine the effectiveness of the internal control. In addition, th ey must write an formal evaluation on the effectiveness as companys recent fiscal year. Finally, an auditor has issued an attestation report on managements assessment (SEC, 2013). Although initially the form costs and efforts of this act were burdensome but after many years companies feel that compliance of the act outweight the costs as well as a great improvement in internal control over 10 years (GARP, 2013).