In 2002, the Sarbanes-Oxley Act was passed in the United States to strengthen the capital market- place. In the following year, there were many debates in Canada about whether the securities com-missions in Canada should adopt the same regulations. In the end, Canada did adopt a similar level of regulation.
(a) Why was the Act issued and what are its key components?
(b) What impact do you think the Act had on the U.S. capital marketplace?
(c) Do you think there were any spillover effects in the Canadian marketplace? (Hint: look on the websites of the provincial securities commissions, the Canadian Institute of Chartered Accountants, the TSX, and the Globe and Mail and Financial Post. Key words might be “SOX,” “corporate accountability,” and “post Enron.”)
(d) Changes to the Sarbanes-Oxley Act were proposed in 2012 under Bill S1933. The bill would allow lower earning private companies to become public without full SOX compliance. One example is that companies earning less than $1 billion annually can defer adoption of certain SOX requirements, an example of which is auditing standards. This change would mean that new public companies deemed to be emerging growth companies can avoid requirements related to mandatory firm rotation and auditor discussion and analysis. Research and discuss two potential benefits and two possible weaknesses of the new bill.

  • CreatedSeptember 18, 2015
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