aud that resulted in business failures of Enron, WorldCom and other publicly traded companies. Ed McCarthy in Journal of Accountancy notes that SOX extends the look-back period for prosecution of violations of federal securities laws. SOX dictates that penalties for fraudulent accounting will apply to corporations, their officers, and in some cases to the corporation's independent CPA auditing firm. In addition, SOX amends or supplement existing legislation dealing with security regulations. SOX also mandates:
Stricter regulation and control of auditors by means of audit committees and inspecting public accounting firms
More significant penalties for committing accounting fraud, as well as for blocking an official investigation or misleading auditors รป and similar inappropriate conduct by employees and members of the Board
A requirement that disclosures mandated by the SEC be made more quickly and that they include more information
Ethical guidelines that senior executives and members of the Board of Directors must obey
A detailed explanation of what constitutes a conflict of interest between the company and one or more of its officers and directors
SOX gives federal judges authority to impose civil monetary penalties as well as jail sentences for individuals convicted of accounting fraud (McCarthy 36)
According to Stuart D. Buchalter and Kristin L. Yokomoto in The CPA Journal SOX includes stricter regulations governing auditors, members of the Board of Directors, and corporate officers. It requires faster and broader public disclosures of material events. SOX includes ethical guidelines to which officer and members of the Board of Directors must adhere. It requires companies to perform a comprehensive assessment of risks relating to business processes that affect financial
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