Question - The United States Congress passed the Sarbanes-Oxley Act of 2002 after several major U.S. corporations were exposed for unethical accounting and reporting practices. During this time period, investor confidence weakened, leading many corporations to undertake initiatives to reexamine their accounting practices.
After reading "The Unexpected Benefits of Sarbanes-Oxley" and "Statement of Financial Accounting Concepts No. 8, Chapter 3," address the areas of similarity between the two documents.
Particularly, focus your discussion on Section 404 of Sarbanes-Oxley and the relevant areas of the FASB Concepts. In your educated opinion, have the necessary accounting and reporting guidelines been instituted to prevent future accounting scandals from occurring? Provide examples to illustrate your position. What are the criticisms of the Sarbanes-Oxley Act?