What prompted Congress to pass the Sarbanes-Oxley Act of 2002?

Answer 1

An act passed by U.S. Congress to protect investors from the possibility of fraudulent accounting activities by corporations. Administered by the Securities and Exchange Commission (SEC) in 2002, SOX regulates corporate financial records and provides penalties for their abuse. It defines the type of records that must be recorded and for how long. It also deals with falsification of data. Affecting data storage capacities and planning, SOX was enacted after the Enron and WorldCom scandals of the early 2000s. The bill was sponsored by Paul Sarbanes, Democratic Senator from Maryland and additionally authored before passage by Michael Oxley, Republican Senator from Ohio.

Answer 2

The Sarbanes-Oxley Act of 2002 amended the Securities Exchange Act of 1934 and expanded rules concerning corporate governance.

Answer 3

B. A series of improper financial disclosures were found during investigations