Question

How did the Sarbanes–Oxley Act impact corporations’ financial reports?

Short answer

The Sarbanes-Oxley Act implemented rules for improving quality of financial reports issued by a company.

Step-by-step solution

The Sarbanes-Oxley act

The Sarbanes-Oxley Act was formed to prevent corporate fraud. This act formed and implemented new rules regarding internal controls, corporate governance, auditing, and fraud prevention.

The impact of the Sarbanes-Oxley act on financial statements

This act implemented new rules regarding the auditing of financial statements to improve the quality, accuracy, and transparency of financial statements. This act also established the Public Company Accounting Oversight Board (PCAOB) for forming auditing standards for public companies.