Chang-Tao, Morris Wu 2nd MBA Dec 15, 2008 Sarbanes-Oxley Act Chang-Tao, Morris Wu 2nd MBA Dec 15, 2008

Background Corporate Scandals Enron, Worldcom, and Tyco frauds Auditor conflicts of interest Boardroom failures Banking practice

SOX’s principles & provisions the birth of SOX 11 titles 4 addressing areas relationships between auditors and audited companies appropriate and inappropriate corporate practices provisions with respect to corporate fraud and accountability requirements that companies implement and document internal control systems

SOX Impacts and Effects Increasing corporations’ costs to comply with SOX regulations The cost is continuously decreasing annually Small businesses could also benefit from SOX SOX’s Effects on Non-US Companies

Criticism of SOX expensive wasteful losing corporate competitiveness

Conclusion SOX does help prevent corporate frauds Ethics education is at least, as important as law enforcement