Why was the Sarbanes-Oxley Act (SOX)enacted?
A)To bring GAAP closer to global financial reporting standards.
B)The lack of significant corporate frauds during the late 1990s and early 2000s warranted less monitoring for external stakeholders.
C)To improve the financial reporting and restore investor confidence.
D)Accounting rules had become so complex that investors could no longer understand them.

Question

Quizplus · Accepted Answer

SOX was created in response to financial statement frauds that occurred in the early 2000s.Confidence in the stock markets had been shaken by frauds involving Enron and WorldCom,so the U.S.Congress passed the act in an attempt to improve financial reporting and restore investor confidence.

Why Was the Sarbanes-Oxley Act (SOX)enacted