Discussion 1 week 2 Sarbanes-Oxley Act (SOX) Assignment

Discussion 1 week 2 Sarbanes-Oxley Act (SOX) - Assignment Example Audit quality has improved, more financial experts have found positions in these committees and number of financial restatements has declined significantly (Cohn 2012). Apple is a global company which is currently facing pollution problems because of a few of its suppliers (Haselton 2011). With the help of SOX, it can pressurize its suppliers to abide by full disclosure rule of corporate policies and avoid breaking environmental laws. Similarly, companies like Lenovo and IBM face criticisms due to their disposal activities jeopardizing the environment. The SOX framework is constituted in a manner which comprises all essential elements of reducing white-collar crime and misalignments in shareholder-auditor interests. The SOX framework talks about the independence of auditor from those who own the company (Sec 404), responsibility of senior executives in presenting true and accurate records (Sec 409), areas where conflict of interests can happen, penalties for alteration/manipulation of financial data and even corporate crimes including offences and failure to comply with rules and regulations (Sec 802). With the help of these sections and sub-sections, companies under the pressure of corporate social responsibility can be encouraged to abide by the rules. Evaluate how the SOX has reinforced investors’ and creditors’ confidence in companies and how these individuals can take steps to verify the accuracy of the financial statements of potential investments or loans. Provide support for your rationale.   SOX has emerged as an apt and demanded medium to expose financial manipulations in corporate activities. Its most important element which reinforces trust and confidence is its emphasis on both the companies and the auditors being accountable and transparent in their deeds. For instance, Tyco International had its shareholders’