What must businesses and accounting firms do to comply with SOX's requirements?

In Chapter 27, we discuss accountant liability. J. Beatty, S. Samuelson, and D. Bredeson, Business Law and the Legal Environment 644-68 (6th ed. 2013). As the Enron scandal was being untangled, Arthur Andersen, once prided on its ethics, became the first accounting firm to be convicted of a crime (that is what you get for shredding documents!). Id. at 644-45. Since then, accountants, regulators, and the public have begun to re-think the role of the accounting professions. For example, shareholders now expect accountants to be more careful watchdogs than, in many cases, they were. This, however, presents a unique situation: How will accountants handle the inherent conflict of interest between shareholders and the managers who actually pay the bills?

Welcome to the Sarbanes-Oxley Act of 2002 (“SOX”). In attempts to restore investor confidence following the Enron bankruptcy and the Arthur Anderson criminal matter, Congress passed SOX. For your assignment, prepare a short memorandum outlining:

What problems does SOX address?
What must businesses and accounting firms do to comply with SOX’s requirements?
What are the costs of complying with SOX?
Do you feel SOX has been effective in achieving its goals?

Cite any reference material used to complete your assignment.

This assignment will be out of 15 points and will be worth 5% of your overall grade in this course. The grading rubric will be:

3 points each (12 points total) Accurate and complete analysis of each of the above four questions (major provisions, requirements, compliance costs, and effectiveness)
3 points Proper use of punctuation, grammar, etc.