The Sarbanes-Oxley Act

The Sarbanes-Oxley Act, enacted in 2002, is a U.S. law designed to enhance corporate governance and financial transparency in the wake of accounting scandals like Enron and WorldCom. It mandates strict reforms for public companies, including accurate financial reporting, the establishment of internal controls, and greater accountability for executives. The act also created the Public Company Accounting Oversight Board (PCAOB) to oversee auditing firms. By increasing oversight, it aims to protect investors and restore trust in the financial markets, ensuring that companies provide truthful and reliable financial information.