Describe the relationship between the Sarbanes-Oxley Act and COSO. (10 points)
COSO issues articles that aim to assist public companies to comply with sections of the Sarbanes-Oxley Act. COSO is also the standard by which Sarbanes-Oxley Act compliance is judged.
In two to three paragraphs, describe the Sarbanes-Oxley Act and why it is important to the accounting profession. (15 points)The Sarbanes-Oxley Act was passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. SOX was enacted in response to the accounting scandals in the early 2000s. Scandals such as Enron, Tyco, and WorldCom shook investor confidence in financial statements and required an overhaul of regulatory standards.
SOX was enacted following a series of failures involving various functions designed to protect the interests of the investing public. Containing several highly controversial provisions, SOX created a total revision of the regulatory framework for the public accounting and auditing profession and provided guidance for strengthened corporate governance.
Describe the relationship between the Sarbanes-Oxley Act and COSO Answer