Sarbanes-Oxley Act

The Sarbanes-Oxley Act, enacted in 2002, is a U.S. law designed to enhance corporate governance and accountability in response to financial scandals, such as Enron and WorldCom. It mandates stricter financial reporting practices, requiring companies to ensure the accuracy of their financial statements and improve the transparency of their operations. This includes having independent audits and established internal controls. The law aims to protect investors by restoring trust in the financial markets, ensuring that companies provide honest and reliable information about their financial health.