What aspect of corporate governance is highlighted by the Sarbanes-Oxley Act?

What aspect of corporate governance is highlighted by the Sarbanes-Oxley Act?

• A. Employee engagement
• B. Investment strategies
• C. Financial reporting reliability
• D. Marketing effectiveness

Answer: (C)

The Sarbanes-Oxley Act (SOX), enacted in 2002, primarily aims to enhance the accuracy and reliability of financial reporting in publicly traded companies. It was introduced in response to significant corporate scandals that shook investor confidence and highlighted the need for stricter regulations governing how companies report their financial status. By establishing stringent measures for financial disclosures, corporate accountability, and internal controls, the Act ensures that organizations provide truthful and transparent financial information. This commitment to financial reporting reliability is crucial for protecting investors and maintaining the integrity of the financial markets. Ultimately, SOX aims to prevent fraudulent financial practices and enhance overall governance and oversight within corporations, reinforcing the importance of having accurate and reliable financial statements. This focus on financial integrity makes option C the correct answer.

The Sarbanes-Oxley Act (SOX), enacted in 2002, primarily aims to enhance the accuracy and reliability of financial reporting in publicly traded companies. It was introduced in response to significant corporate scandals that shook investor confidence and highlighted the need for stricter regulations governing how companies report their financial status.

By establishing stringent measures for financial disclosures, corporate accountability, and internal controls, the Act ensures that organizations provide truthful and transparent financial information. This commitment to financial reporting reliability is crucial for protecting investors and maintaining the integrity of the financial markets.

Ultimately, SOX aims to prevent fraudulent financial practices and enhance overall governance and oversight within corporations, reinforcing the importance of having accurate and reliable financial statements. This focus on financial integrity makes option C the correct answer.