3.12 Sarbanes-oxley Act of 2002

• Library: Corporations and Partnerships in Virginia (Virginia CLE) (2016 Ed.)

3.12 SARBANES-OXLEY ACT OF 2002

In response to high-profile accounting scandals affecting large public companies, Congress enacted the Sarbanes-Oxley Act of 2002, also known as the Public Company Accounting Reform and Investor Protection Act of 2002. ⁴⁰⁷ The Sarbanes-Oxley Act is not limited to federal securities

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regulation, although it has significantly impacted several federal securities rules and regulations and generally has increased the costs associated with being a public company. Generally, the Sarbanes-Oxley Act creates a Public Company Accounting Oversight Board to register public accounting firms and establish standards for the audits of public companies. The Sarbanes-Oxley Act prohibits public accounting firms from performing specific services for their audit clients, including internal audit services and financial information systems design and...