What significant legislation was introduced in 2002 to combat fraud in accounting?

The Sarbanes-Oxley Act, enacted in 2002, represents a crucial effort to enhance corporate governance and accountability in the wake of significant financial scandals involving major corporations. This legislation established stringent reforms aimed at improving the accuracy and reliability of corporate disclosures, thereby restoring public confidence in the financial reporting process.

Key provisions of the Sarbanes-Oxley Act include the requirement for companies to establish internal controls over financial reporting, increased penalties for fraudulent financial activity, and the establishment of the Public Company Accounting Oversight Board (PCAOB) to oversee the activities of auditing firms. Additionally, the Act also mandates that top executives certify the accuracy of financial statements, thereby holding them accountable for misleading information.

The other legislative acts listed, while also significant in their respective contexts, do not specifically target accounting fraud in the same way. The Dodd-Frank Act, for instance, focuses more broadly on financial regulation and consumer protection in the financial services industry. The Foreign Corrupt Practices Act addresses bribery and corruption in international business operations. The Public Accounting Reform Act, although relevant to the auditing profession, does not have the same level of comprehensive reforms aimed specifically at preventing fraud as the Sarbanes-Oxley Act does. Thus, the Sarban