The Sarbanes Oxley Act – An Answer to Corporate Governance Scandals
The Sarbanes Oxley Act – An Answer to Corporate Governance Scandals

Summary/Abstract: The Sarbanes Oxley Act is considered to be the result of the great corporate scandals of 2002. However, it is to be noted that the regulatory framework of corporate governance was placed under heavy criticism since 1998, when the Russian capital market crisis broke out. Finally it took another four years and another wave of global corporate scandals to conclude into a comprehensive and more international approach of regulation. Motivated by vast corporate frauds like Enron and Worldcom, the Sarbanes Oxley regulation was on the one hand genuinely American, while on the other hand more international as it was first expected to be. Nevertheless, both American corporations, and international investors approached the new provisions of the Act with rising suspicion. Moreover, the extraterritorial effect of the regulation often demotivated seasoned companies from their original plan to register on the New York Stock Exchange.

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