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The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations.

Quick facts: Long title, Nicknames, Enacted by, Citat...
Sarbanes–Oxley Act of 2002
Long titleAn Act To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.
NicknamesSarbanes–Oxley, Sarbox, SOX
Enacted bythe 107th United States Congress
Citations
Public lawPub.L. 107–204 (text) (PDF)
Statutes at Large116 Stat. 745
Codification
Acts amendedSecurities Exchange Act of 1934, Securities Act of 1933, Employee Retirement Income Security Act of 1974, Investment Advisers Act of 1940, Title 18 of the United States Code, Title 28 of the United States Code
Titles amended15, 18, 28, 29
Legislative history
  • Introduced in the House as "Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002" (H.R. 3763) by Mike Oxley (R-OH) on February 14, 2002
  • Committee consideration by House Financial Services, Senate Banking
  • Passed the House on April 24, 2002 (334–90)
  • Passed the Senate as the "Public Company Accounting Reform and Investor Protection Act of 2002" on July 15, 2002 (voice vote, in lieu of S. 2673 passed 97–0)
  • Reported by the joint conference committee on July 24, 2002; agreed to by the House on July 25, 2002 (423–3) and by the Senate on July 25, 2002 (99–0)
  • Signed into law by President George W. Bush on July 30, 2002
United States Supreme Court cases
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Sen. Paul Sarbanes (DMD) (left) and Rep. Michael G. Oxley (ROH-4) (right), the co-sponsors of the Sarbanes–Oxley Act

The act, (Pub.L. 107–204 (text) (PDF), 116 Stat. 745, enacted July 30, 2002), also known as the "Public Company Accounting Reform and Investor Protection Act" (in the Senate) and "Corporate and Auditing Accountability, Responsibility, and Transparency Act" (in the House) and more commonly called Sarbanes–Oxley, SOX or Sarbox, contains eleven sections that place requirements on all U.S. public company boards of directors and management and public accounting firms. A number of provisions of the Act also apply to privately held companies, such as the willful destruction of evidence to impede a federal investigation.

The law was enacted as a reaction to a number of major corporate and accounting scandals, including Enron and WorldCom. The sections of the bill cover responsibilities of a public corporation's board of directors, add criminal penalties for certain misconduct, and require the Securities and Exchange Commission to create regulations to define how public corporations are to comply with the law.[1]