Which act is designed to target corporate financial misconduct?

Which act is designed to target corporate financial misconduct?

• A. Health Insurance Portability and Accountability Act
• B. Sarbanes-Oxley Act
• C. Digital Millennium Copyright Act
• D. Federal Information Security Management Act

Answer: (B)

The Sarbanes-Oxley Act is specifically designed to address corporate financial misconduct. It was enacted in response to major financial scandals in the early 2000s, such as Enron and WorldCom, which highlighted the need for more rigorous financial practices and reporting requirements to protect investors. The act established stricter regulations on financial disclosures, corporate governance, and accountability. It also created the Public Company Accounting Oversight Board (PCAOB) to oversee the audits of public companies, ensuring more reliability and transparency in financial reporting. This legislative measure seeks to enhance the accuracy of corporate disclosures and restore public confidence in the financial markets. In contrast, the other acts mentioned serve different purposes. The Health Insurance Portability and Accountability Act focuses on healthcare information privacy and security, while the Digital Millennium Copyright Act deals with copyright issues in the digital environment. The Federal Information Security Management Act pertains to information security for federal agencies and does not directly address corporate financial misconduct.

The Sarbanes-Oxley Act is specifically designed to address corporate financial misconduct. It was enacted in response to major financial scandals in the early 2000s, such as Enron and WorldCom, which highlighted the need for more rigorous financial practices and reporting requirements to protect investors. The act established stricter regulations on financial disclosures, corporate governance, and accountability. It also created the Public Company Accounting Oversight Board (PCAOB) to oversee the audits of public companies, ensuring more reliability and transparency in financial reporting. This legislative measure seeks to enhance the accuracy of corporate disclosures and restore public confidence in the financial markets.

In contrast, the other acts mentioned serve different purposes. The Health Insurance Portability and Accountability Act focuses on healthcare information privacy and security, while the Digital Millennium Copyright Act deals with copyright issues in the digital environment. The Federal Information Security Management Act pertains to information security for federal agencies and does not directly address corporate financial misconduct.