After the controversial scandals of organizations such as Enron, WorldCom, and Tyco, the Sarbanes-Oxley Act became law and procedure on July 30, 2002. The main aspects of the Sarbanes-Oxley Act policies and regulations were designed to prevent and deter future accounting fraud, protection for shareholders and maximizing assurance in public company financial reporting in diverse U.S. capital markets. Altogether, the Sarbanes-Oxley Act of 2002 has imposed tremendous new duties and cost on public companies and accounting firms, while the people involved are still unaware about whether the money, time and focus on the Sarbanes-Oxley Act of 2002 are worth the benefits that were sacrificed. It would be difficult to eliminate fraud within organizations just by policies and procedure, so owners of organizations will have to encourage SOX by expressing it to the workers, and owners themselves will have to be disciplined enough to gain the trust of workers. It must be proven to be a secure and legitimate organization. .
Steve Barth is the co-chairman of an organization called Foley & Lardner's national transactional and securities practice. Steve Barth mentioned that the Sarbanes-Oxley Act of 2002 was a complete failure that would not eliminate nor deter employee fraud, and believed it to be a waste of time, effort, and money. Many owners agree with Barth that by SOX being intended to generate further confidence in the U.S. market capitals, it still hasn't completely prohibited fraud and abuse from happening. There has not really been any substantial evidence presenting that the stock market has become further dependable over the past 10 years since the Sarbanes-Oxley Act of 2002. There are not been any information accurately proving that SOX has actually did what it was set out to do (Maleske, 2012).
Effectiveness of SOX Against Fraud.
The Sarbanes-Oxley Act of 2002 have somewhat changed public companies, which is undisputable.