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BSHS 373 Week 3 Discussion Question 1

What accounting issues does the Sarbanes-Oxley Act of 2002 address? Which of the act’s provisions apply to both nonprofit and for-profit organizations? Do you think the Sarbanes-Oxley Act of 2002 is an effective solution? Explain your answer.

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Sarbanes-Oxley Act (SOX) of 2002 resulted from the large number of accounting scandals particularly by Enron, WorldCom and Tyco. The main provisions were Section 302 that requires a senior manager to certify the accuracy of any financial documents that are reported, and Section 404 requires that management and auditors implement internal controls and reporting practices regarding all accounting practices within public companies to be in compliance with SOX. Currently, the main financial reform acts covered by SOX do not apply to nonprofits other than two specific areas, record retention and retaliation against whistle blowers. However, the intention of the act and the safety

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