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Home > QFINANCE Dictionary > Definition of Sarbanes–Oxley Act

Definition of

Sarbanes–Oxley Act

Regulation & Compliance

US law covering financial reporting and accountability a corporate governance law that came into effect in the United States in 2005. Created in the aftermath of a series of high-profile financial scandals, including Enron and WorldCom, Sarbanes–Oxley seeks to overhaul corporate financial reporting by improving its accuracy and reliability. Though it is an American law, its reach is global and has affected the way that large companies and audit firms do business. Chief executives are to take full responsibility for the accuracy of all financial results by signing a statement to that effect, thereby putting paid to the so-called “aw shucks” defense strategy adopted by senior executives involved in earlier financial scandals. Under this strategy, the accused maintained that they were simply not aware of the distortion of financial reporting that took place under their governance.

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Definitions of ’Sarbanes–Oxley Act’ and meaning of ’Sarbanes–Oxley Act’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’Sarbanes–Oxley Act’ and other financial terms with our online QFINANCE Financial Dictionary.

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