Research paper

Although it is made up of eleven sections, five sections stand out as the most crucial: sections 302, 401, 404, 409 and 802 (LexisNexis, 2002, p.3).Section 302 of the act makes it mandatory for corporate bodies to release financial reports whose accuracy, truthfulness, and completeness is certified. In addition, the signing officers must certify their evaluation of the report. Any material changes that could affect the report or its internal controls must be disclosed and certified, as well as any shortcomings in the firm's internal control mechanisms. In addition, this section requires any information relating to fraud involving employees to be disclosed, and the signing officers to undertake an evaluation of the company's internal controls at least 90 days before the report's release (LexisNexis, 2002, p.12). Section 404 requires firms to disclose the structure, extent of responsibility powers and duties, and competencies of their internal control systems. In addition, financial reporting procedures must be disclosed. The auditing firm acting on behalf of the firm is required to return a verdict as to the effectiveness of these structures (LexisNexis, 2002, p.21).Section 409 commit issuers of financial reports to urgent disclosures of any changes in their financial status or operations in an easy to understand manner, supported by evidence (LexisNexis, 2002, p.32).

Section 802 of the Sarbanes-Oxley Act outlines the penalties that may be imposed on any party that seeks to hinder investigative action through destroying, changing, defacing, concealing, damaging, or falsifying records. It sets a jail limit of 20 years, in addition to fines. It also sets a jail term of up to ten years for accountants who neglect to perform audits and accounting reviews as prescribed (LexisNexis, 2002, p.43).Section 401 of the act requires financial reports to be accurate and presented in a factual manner. It requires the reports to include "all material off-balance sheet liabilities, obligations or transactions." The section mandated a commission to determine whether adherence to GAAP's has any impact on the transparency and usefulness of financial reports and the impact of off-balance transactions on the transparency of the reports (LexisNexis, 2002, p.52).

Conclusion The Enron scandal involved massive fraud in the financial reporting system, insider trading, apathy on the part of internal and external oversight bodies, and to a certain extent had a political angle to it. It therefore was a scandal brought about by weaknesses in the fiscal, accounting, and political structures and caused huge financial losses to investors, employees and creditors. One offshoot of the scandal was the enactment of the Sarbanes Oxley Act which introduced stricter corporate governance regulations to avert the recurrence of similar scandals in future.

I have turned in this research paper a long time ago. Check how good the writing style is! If "Who will write my research paper?" question is still in your head, buy a research paper from this custom writing service and check out the result!