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ACC 561 Week 2 Regulatory Environment Paper

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Accounting

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Homework

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Write a paper that describes the main aspects of the regulatory environment which will protect the public from fraud
within corporations, Pay particular attention to SOX requirements
ACC 561 Sarbanes - Oxley Act of 2002
In this paper the author will describe the main aspects of the regulatory
environment which will protect the public from fraud within corporations.
The author will pay special attention to the Sox requirement; along with
evaluating whether Sox will be effective in avoiding future frauds.
Regulatory environment consist of several laws and regulations that has
been developed by federal, state, and local governments in order to limit
control over business practices. The regulatory environment plays an
important role in the positive operation of the financial sector and in the
efficient management and integration of capital flow and domestic
savings. “The value of the claims of financial institutions on borrowers is
dependent upon the certainty of legal rights, coupled with the
predictability and speed of their fair and impartial enforcement. Legal
and regulatory frameworks that empower the regulator and govern the
conduct of market participants form the cornerstone of the orderly
operation and development of the financial sector” (Making Finance
Work for Africa, 2012). Regulatory compliance has always been a part of
doing business. In almost all industry there are a variety of governments

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and industry regulations that they company must follow in the way that
they conduct their business and the penalties of not following the
regulations are clearly defined within the company (Doculabs White
Papers, 2012).
There are many regulations that has been around for a long period of
time that were developed to help protect the public from fraud such as;
state filing requirements or fair lending laws and most businesses have
meet the standards of these long standing regulations. The U.S.
Securities and Exchange Commission is developed to help protect
investors, maintain fair, orderly, and efficient markets, and facilitate
capital information. Many people are turning to the markets to help
secure their futures, pay for homes, and send their children to college;
so it is now more important for this SEC to protect the investor. The
nation’s securities exchange has went global for profit competitors, so
there is greater need for sound market regulations, “And the common
interest of all Americans in a growing economy that produces jobs,
improves our standard of living, and protects the value of our savings
means that all of the SEC's actions must be taken with an eye toward
promoting the capital formation that is necessary to sustain economic
growth” (The Investors Advocate, 2013).

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“The laws and rules that govern the securities industry in the United
States derive from a simple and straightforward concept: all investors,
whether large institutions or private individuals, should have access to
certain basic facts about an investment prior to buying it, and so long as
they hold it (The Investors Advocate, 2013) ”. To make sure this
happens, the SEC requires that all public companies to make all
meaningful financial and other information available to the general
public. This gives knowledge for all investors to use to judge for
themselves whether they want to buy, sell, or hold a particular security.
This will also help the public to make timely, comprehensive, and
accurate sound investment decision (The Investors Advocate, 2013).
“The result of this information flow is a far more active, efficient, and
transparent capital market that facilitates the capital formation so
important to our nation's economy (The Investors Advocate, 2013)”. The
SEC is continuing to work with all major market participants to insure
that this objective is always being followed. The SEC makes a point to
listen to the investors in our securities markets, about their concerns and
they take these concerns and learn from their experience (The Investors
Advocate, 2013).
“The SEC oversees the key participants in the securities world, including
securities exchanges, securities brokers and dealers, investment

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