Do you believe the Sarbanes-Oxley Act of 2002 has addressed the corporate governance issues that may have led to the collapse of Enron, WorldCom and Adelphia Communications? How or why not? Support your response with substantive arguments.
The Sarbanes-Oxley Act of 2002, also known as SOX, was passed after the accounting scandals at Enron, WorldCom, Global Crossing, Tyco and Arthur Andersen. This scandal resulted in billions of dollars in corporate and investor losses which negatively impacted the financial markets and general investor trust.
Publicly-traded companies in the United States, including all wholly-owned subsidiaries and all publicly-traded non-US companies doing business in the US are affected. Also, any private companies that are preparing their initial public offering (IPO) will also need to comply with certain provisions of Sarbanes-Oxley.