Sarbanes Oxley

The sarbanes oxley act what Traded

Despite popular belief, the Sarbanes Oxley effect on organizations not publicly traded is still being felt today despite the fact it was enacted with the declared purpose of protecting public interest when the companies involved had public trading.  Therefore, it may seem confusing as to why there is a Sarbanes Oxley effect on organizations not publicly traded.  Nonetheless, there is a great effect felt among of all business, non-profit organizations.

Yes, the Sarbanes Oxley effect on organizations not publicly traded falls mostly on organizations that are non-profit.  The reason why, is that the main directive and most controversial part of the sarbanes oxley act what effect on organizations not publicly traded is the adage to the legislative act that clearly states that business leaders, or CEO’s, are directly responsible for the effects of their financial statements.  When Sarbanes Oxley was passed, this was originally meant to mean that if there are large financial returns showing on a businesses’ financial statement, but the general public experiences huge losses, this demonstrates that there was illegal trading occurring and that the CEO most now answer to the general public how they lost money and the business did not.

This is the original reason why the sarbanes oxley act what law was passed, because companies such as Enron used insider trading and hedge trading to make sizable profits at the public’s loss.  In trial, the CEO’s denied being able to explain why their financial statements were so large at the same time their public clients lost so much.  Clearly, it was because their executives employed insider trading. 
They claimed it was not their legal responsibility to have to explain and account for the financial statements of their business, a defense that eventually was thrown out by the court system.  To prevent this situation from occurring again, and saving the public shareholders from experiencing huge loss again, the legislation was passed that all businesses had to be able to account for their financial statements, which is why there is a sarbanes oxley act what effect on organizations not publicly traded.

The sarbanes oxley act what effect on organizations not publicly traded most often effects non-profit organizations since these sectors of the business world often involve whistle blowing protection.  However, the Sarbanes Oxley effect on organizations not publicly traded, with its new legislation regarding responsibly for financial statements, overthrows the whistle blowing protection and so now non-profit organizations are struggling to rebuild their receipt history and prove that their financial statements are legitimate.

 

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