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Is it Time to Change SOX?

Is it Time to Change SOX?. Orkhontuul Turmandakh MA1N0216. Introduction. In 2000 and 2001, Congress passing the Sarbanas -Oxley Act of 2002 (SOX)for accounting irregularities at a number of large corporations. Not everyone pleased with the law.

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Is it Time to Change SOX?

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  1. Is it Time to Change SOX? OrkhontuulTurmandakh MA1N0216

  2. Introduction • In 2000 and 2001, Congress passing the Sarbanas-Oxley Act of 2002 (SOX)for accounting irregularities at a number of large corporations. • Not everyone pleased with the law. • Many companies complain that compliance with SOX reporting regulations. • They spend much time and money. For example: spent an average of $3.8million in 2005 to comply with the law.

  3. Introduction • The most troublesome aspect of SOX appears to be Section 404. • Section 404 requires companies 1st review their own systems for ensuring accurate financial reports and then have them tested by outside auditors. • In 2006, U.S. Treasury Secretary Henry Paulson acknowledged the impact of the accounting previsions, especially on small business.

  4. Introduction • Supporters of SOX claim that the law related reforms have produced more reliable corporate financial statements, which investors rely on when deciding whether to buy or sell shares.

  5. Introduction • According to Investment officers- reports that improvements have been shown in each of the past 4 years. • The jury is out on SOX will be changed to relieve the burden on U.S corporations. • In 2000 and 2001,on the day SOX was signed into law, the market value of the Wilshire 5000, a proxy for all public companies in the United States, by 10.5trillion.

  6. Introduction • In 2007, value of Wilshire 5000 was 14.5 trillion. • While the markets factor many events, the passage of SOX has not had a significantly negative impact.

  7. Question??? • In addition to investors, who else might be benefiting directly from the implementation of the Sarbanes-Oxley Act?

  8. Answers • Outside auditors: Why? Because this Section 404 of SOX systems for ensuring accurate financial reports and then have them tested by outside auditors. • Public companies: SOX was signed into law, the U.S market value of the Wilshire 5000 increased from 10.5 to 14.5 trillion. • Country’s Government: • The government attracted more investors. • increased foreign investment • made valuable contribution

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