The Sarbanes-Oxley Act of 2002 represents a watershed in arresting off-balance sheet accounting, setting new standards for corporate governance and financial reporting. It has new implications for HR managers and their responsibilities.
On July 30, 2002, the Sarbanes-Oxley Act (Public Law 104-204) came into effect, and changed the corporate landscape in the US with regard to financial reporting and auditing for publicly-traded companies. It stipulates stringent financial reporting requirements for companies doing business in the US. (www.dmreview.com)
The financial scandals relating to companies such as Enron, WorldCom, and of late, Sainsbury and Marks & Spencers, etc., were eye-openers of sorts. They proved that existing mechanisms pertaining to board and external fiduciary responsibility in corporate management and financial reporting were flawed. In the said scandals proved that managerial hostility towards whistleblowing poses a barrier to corporate governance. The new standards established by Sarbanes-Oxley (SOX) have far-reaching implications not only for publicly-listed companies in the US, but also for those firms, which conduct business with such companies. |
