The primary purpose of the Sarbanes-Oxley Act of 2002 is to
A)protect investors from corporate abuses.
B)apply restrictions on foreign firms operating in the United States.
C)protect financial managers from investors.
D)decrease audit costs for U.S.firms.
E)reduce corporate revenues.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act of 2002 was primarily passed to protect investors from corporate abuses and increase transparency in financial reporting by imposing strict accounting and reporting requirements on public companies. The law was enacted in response to high-profile corporate scandals, such as Enron and WorldCom, that shook investor confidence in the financial system. The Act also created the Public Company Accounting Oversight Board (PCAOB) to regulate auditors of public companies, further strengthening investor protection.

The Primary Purpose of the Sarbanes-Oxley Act of 2002 Is