Enron scandal Former employees of Enron sitting with their belongings after being laid off, December 3, 2001. (more) Sarbanes-Oxley Act of 2002 United States [2002] Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/topic/Sarbanes-Oxley-Act Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a type (Required) Factual Correction Spelling/Grammar Correction Link Correction Additional Information Other Your Feedback Submit Feedback Thank you for your feedback Our editors will review what you’ve submitted and determine whether to revise the article.

　　External Websites Ask the Chatbot a Question Written by Frannie Comstock Frannie Comstock is a writer based in Chicago. Frannie Comstock Fact-checked by The Editors of Encyclopaedia Britannica Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors. The Editors of Encyclopaedia Britannica Last Updated: Jan 7, 2025 • Article History Table of Contents Table of Contents Ask the Chatbot a Question { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type" : "Question", "name" : " What led to the creation of the Sarbanes-Oxley Act? ", "acceptedAnswer" : { "@type" : "Answer", "text" : "The Sarbanes-Oxley Act was created in response to multiple corporate accounting scandals, including the Enron scandal, in the early 2000s." } } , { "@type" : "Question", "name" : " What are the main objectives of the Sarbanes-Oxley Act? ", "acceptedAnswer" : { "@type" : "Answer", "text" : "The main objectives are to reduce corporate fraud by strengthening financial auditing and public disclosure requirements for publicly traded companies and increasing penalties for certain white-collar crimes." } } , { "@type" : "Question", "name" : " Who sponsored the Sarbanes-Oxley Act? ", "acceptedAnswer" : { "@type" : "Answer", "text" : "The Sarbanes-Oxley Act was sponsored by Republican Rep. Michael G. Oxley and Democratic Sen. Paul Sarbanes." } } , { "@type" : "Question", "name" : " What is the Public Company Accounting Oversight Board? ", "acceptedAnswer" : { "@type" : "Answer", "text" : "Established by Title I of the act, the Public Company Accounting Oversight Board is an independent nonprofit corporation that oversees the audit of public companies to protect investors and ensure accurate audit reports." } } , { "@type" : "Question", "name" : " What are some criticisms of the Sarbanes-Oxley Act? ", "acceptedAnswer" : { "@type" : "Answer", "text" : "Critics argue that compliance with the Sarbanes-Oxley Act is costly and has negatively impacted smaller firms." } } ] } Top Questions What led to the creation of the Sarbanes-Oxley Act? The Sarbanes-Oxley Act was created in response to multiple corporate accounting scandals, including the Enron scandal, in the early 2000s.

　　What are the main objectives of the Sarbanes-Oxley Act? The main objectives are to reduce corporate fraud by strengthening financial auditing and public disclosure requirements for publicly traded companies and increasing penalties for certain white-collar crimes.

　　Who sponsored the Sarbanes-Oxley Act? The Sarbanes-Oxley Act was sponsored by Republican Rep. Michael G. Oxley and Democratic Sen. Paul Sarbanes.

　　What is the Public Company Accounting Oversight Board? Established by Title I of the act, the Public Company Accounting Oversight Board is an independent nonprofit corporation that oversees the audit of public companies to protect investors and ensure accurate audit reports.

　　What are some criticisms of the Sarbanes-Oxley Act? Critics argue that compliance with the Sarbanes-Oxley Act is costly and has negatively impacted smaller firms.

　　Sarbanes-Oxley Act of 2002, U.S. federal law adopted in the wake of multiple corporate accounting scandals, including the infamous Enron scandal, in the early 2000s. The Sarbanes-Oxley (SOX) Act was designed to reduce corporate fraud by strengthening financial auditing and public disclosure requirements for publicly traded companies and increasing penalties for certain white-collar crimes. The Enron scandal involved several acts of auditing and disclosure fraud—including concealment of debts and financial losses—by the Enron Corporation, a major public energy company. After a whistleblower exposed Enron’s misconduct, the company’s stock price dropped from about $40 in August 2001 to less than $1 ...(100 of 824 words)

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