SARBANES OXLEY ACT, GAAP and IFRS
Sarbanes Oxley Act, GAAP and IFRS
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Discuss the impact of the Sarbanes-Oxley Act (SOX) on corporate governance and financial
reporting practices in the United States, focusing on its influence on materiality, internal
controls, and auditor responsibilities. Additionally, compare the key differences between
Generally Accepted Accounting Principles (GAAP) and International Financial Reporting
Standards (IFRS) with respect to public company financial reporting. Analyze how the
implementation of these frameworks has affected the accuracy and reliability of financial
statements. Provide real-world examples to support your arguments."
Word Count Requirement: 2000-2500 words.

SARBANES OXLEY ACT, GAAP and IFRS

Sarbanes Oxley Act
Sarbanes Oxley Act, GAAP and IFRS
Introduction
One of the most important aspects of organization is Financial Reporting. The
governing authority has put forward several principles and concepts, companies are required
to focus on the principles and guidelines for recording financial transactions.
The financial scandals in 1990’s and 2000‘s aroused a question on the reliability of
the financial statements of the corporates along with the regulating corporate governance and
the accounting profession of the country. The investors got highly worried about the scandals,
due to which investors loss their faith and confidence on investment which crashed the stock
market.
Government of America enacted an act “Sarbanes Oxley Act” in the year 2002 which
focussed on protection against accounting frauds and different malpractices. With the
announcement of Sarbanes Oxley act on July 25th’ 2002, the stock market indices of the large
capitalization stocks had fallen down by 40%.
The Sarbanes Oxley is the act which focuses on fixing the focuses to auditing effects
of the US organization. The main aim of this act is to bring accurate and reliable picture of
the company. The companies are required to present their financials accurately. This act
makes management personally liable for the accuracy of the financial statements and focuses
on the accuracy of financial reporting. This act safeguards the interest of investors who invest
in stock of the company. The act mainly focuses on the internal control of the organization in
terms of accounting. Sarbanes-Oxley Act has co-ordinated several laws, such as corporate
responsibility of organization, responsibility and regulations of auditors, and also enhanced
the disclosure policies for the organization.

Sarbanes Oxley Act, GAAP and IFRS

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