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how has the sox act helped to avoid frauds such as enron worldcom, take post below and agree with her position and discuss how it has helped to avoid the fraud
A majority of the cases in this class occurred in the late 1990s through the early 2000s. To help improve auditing standards, Congress passed the Sarbanes-Oxley Act of 2002. This law helps to protect investors from fraudulent financial reporting by corporations. It mandated strict reforms to existing securities regulations and imposed tough new penalties on lawbreakers. This law came in response to highly publicized corporate financial scandals such as Enron and WorldCom.
In 2003, the SEC updated their rules on auditor independence. This requires the lead partner to rotate off an engagement after a maximum of five years. Upon rotation, they must be off the engagement for five years as well. This helps the auditor maintain its independence. Through this new rule, it makes it cost effective for the company and the audit firm. The company does not have to find a new auditor which is timely and very costly, but they are still receiving an unbiased audit.