Sarbanes-Oxley Act of 2002
Definition - What does Sarbanes-Oxley Act of 2002 mean?
The Sarbanes-Oxley Act of 2002 is a law that was passed in the wake of several high-profile corporate fraud scandals, such as the Enron incident.
This Act added stronger anti-fraud measures for corporate accounting and for accounting firms that audit public corporations. The goal of this Act is to protect investors from fraudulent corporate accounting practices.
Justipedia explains Sarbanes-Oxley Act of 2002
In addition to imposing stricter accounting regulations, the Sarbanes-Oxley Act of 2002 also gives stronger protection to whistleblowers who speak out about corporate accounting fraud.
The Sarbanes-Oxley Act of 2002 dramatically increased the amount of financial regulations that corporations face. Entire companies were created after this Act went into effect to help businesses comply with the new regulations. The Act covers things such as certification of the accuracy of key documents, and provisions to protect against the falsification of financial statements.