The Sarbanes Oxley Act of 2002 is also known as the “Public Company Accounting Reform and Investor Protection Act.” Corporate and Auditing Accountability, Responsibility, and Transparency Act.” It was more commonly called Sarbanes-Oxley, Sarbox or Sox.
It is a United States federal law that set new or expanded requirements for all our public company boards, management, and public company boards, management, and public accounting firms.
This act is important because a company that does comply with Sarbanes Oxley encounters serious risks of regulatory intervention, which can end in fees and restrictions. It was passed by Congress to safeguard investors from the possibility of fraudulent accounting activities.