Sarbanes Oxley Act, GAAP and IFRS

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SARBANES OXLEY ACT, GAAP and IFRSSarbanes Oxley Act, GAAP and IFRSName of the studentCourse NameUniversity NameDateDiscuss the impact of the Sarbanes-Oxley Act (SOX) on corporate governance and financialreporting practices in the United States, focusing on its influence on materiality, internalcontrols, and auditor responsibilities. Additionally, compare the key differences betweenGenerally Accepted Accounting Principles (GAAP) and International Financial ReportingStandards (IFRS) with respect to public company financial reporting. Analyze how theimplementation of these frameworks has affected the accuracy and reliability of financialstatements. Provide real-world examples to support your arguments."Word Count Requirement:2000-2500 words.

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SARBANES OXLEY ACT, GAAP and IFRS

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Sarbanes Oxley ActSarbanes Oxley Act, GAAP and IFRSIntroductionOne of the most important aspects of organization isFinancialReporting. Thegoverning authority has put forwardseveral principles andconcepts, companies are requiredto focuson the principles and guidelines for recording financial transactions.The financial scandals in 1990’s and 2000‘s arouseda question on the reliability ofthe financial statements of the corporates along with the regulating corporate governance andthe accounting profession of the country. The investors got highlyworriedabout the scandals,due to which investors loss their faith and confidenceon investment whichcrashedthe stockmarket.Government of America enacted an act “Sarbanes Oxley Act” in the year 2002 whichfocussed on protection against accounting frauds and different malpractices.With theannouncement of Sarbanes Oxley act on July 25th’ 2002, the stock market indices of the largecapitalization stocks had fallen down by 40%.The Sarbanes Oxley is the act whichfocuses on fixing thefocuses to auditing effectsof the US organization. The mainaimof this act istobring accurate and reliable picture ofthe company.The companies are required to present their financials accurately. This actmakes management personally liable for the accuracy of the financial statements and focuseson the accuracy of financial reporting. This act safeguards the interest of investors who investin stock of the company. The act mainly focuses on the internal control of the organization interms of accounting. Sarbanes-Oxley Act hasco-ordinatedseveral laws, such ascorporateresponsibilityof organization, responsibility and regulations of auditors,and alsoenhancedthedisclosure policies for the organization.

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