What does the Sarbanes-Oxley Act aim to improve in the accounting profession?

The Sarbanes-Oxley Act, enacted in response to major corporate scandals, primarily aims to enhance the reliability of financial reporting and restore public confidence in the financial markets. By providing the Securities and Exchange Commission (SEC) with improved resources, the Act strengthens the agency's ability to oversee and enforce accounting standards, thereby significantly advancing the fight against corporate fraud.

The law establishes more stringent reporting requirements for public companies and imposes severe penalties for fraudulent financial activity, which directly supports the SEC's mission to protect investors and maintain fair, orderly, and efficient markets. Through heightened regulations related to internal controls and the accuracy of financial statements, the Act encourages transparency and accountability in financial reporting, effectively combating the risk of fraudulent practices in the accounting profession.