Will the Sarbanes-Oxley Act of 2002 Prevent or Give Investors Warning of Enron Type Scandals

Abstract: Investors are impacted when a major company, such as Enron fails due to inventive, creative or manipulative accounting supported by the corporate governance environment. This 50 page paper considers if changing the regulatory environment, as attempted in the US with the introduction of the Sarbanes-Oxley Act of 2002, will either prevent or give early warnings of companies that are presenting misleading accounts. This is achieved by looking at how and why accounts are so important to investor confidence, how they can be manipulated inside and outside the spirit and letter of the law and how this information might be used by investors to value shares and influence the demand for the shares. The case of Enron is then studied and then the paper considers if the Sarbanes-Oxley Act could have prevented the practices that lead to the collapse, or if they would have given an earlier warning. The bibliography cites 36 pages.

Filename: TEsurenron.rtf

Pages: 50

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Catagory: Money & Banking / Corporate Finance

Subcatagory: Accounting & Personal Finance

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