Impact of Sarbanes-Oxley Act on Corporate Governance

Medium Corporate Governance Regulatory Environment

Corporate governance is an essential framework that governs the relationships between a company's management, its board, shareholders, and other stakeholders. Regulatory agencies play a significant role in shaping corporate governance practices. In light of this, consider the impact of the Sarbanes-Oxley Act (SOX), enacted in the United States in 2002, which was a response to major corporate and accounting scandals.

Which of the following statements correctly reflects the regulatory impact of the Sarbanes-Oxley Act on corporate governance practices?

The Sarbanes-Oxley Act abolished the need for independent auditing of publicly traded companies.

The Sarbanes-Oxley Act increased accountability for corporate executives concerning the accuracy of financial reporting.

The Sarbanes-Oxley Act removed the requirement for companies to disclose non-financial information.

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