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What is the main goal of the Sarbanes-Oxley Act (SOX)?

Protect shareholders and the public from corporate fraud

The main goal of the Sarbanes-Oxley Act (SOX) is to protect shareholders and the public from corporate fraud. This legislation was enacted in response to high-profile financial scandals in the early 2000s, such as Enron and WorldCom, which led to significant losses for investors and eroded public trust in financial markets.

SOX introduced rigorous financial disclosure requirements, established internal controls for financial reporting, and imposed severe penalties for fraudulent financial activities. By focusing on transparency and accountability in financial reporting, SOX aims to safeguard the interests of shareholders and restore confidence in the integrity of the financial systems.

The other options relate to different areas of policy, such as health, social services, and environmental regulations, which are outside the scope of SOX. The act is specifically tailored to address corporate governance and financial practices, distinguishing it from legislation aimed at those broader socio-economic issues. Therefore, the focus of SOX is squarely on preventing fraud and ensuring the accuracy of financial statements, thereby prioritizing the protection of shareholders and the public.

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Enhance public health regulations

Increase availability of social services

Regulate environmental practices of corporations

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