Sample Business Paper on The Impact of Sarbanes-Oxley’s Act


After a prolonged period of financial scandals investors experienced, the Sarbanes-Oxley Act was enacted in 2002. The act streamlined the financial and accounting services of institutions hence ensured investors’ confidence. In the streamlining process, businesses experienced increased operations costs. The general manager’s productivity was highly affected due to perceived risks and penalties in case of fraudulent activities (Yimam & Fernandez, 2016). Increased audit fees and corporate advisory services charges significantly reduced the value of the small business.

The act made the US Capital markets less attractive than foreign markets as these investors experienced less productive management and lower returns. Due to strict guidelines, small and upcoming businesses faced difficulties having capital while mergers had the best opportunities (Blokhin, 2020). The act also ensured full financial disclosure in which was risky since competitors could use that information to their advantage. Many companies were targeting to go public, but after the act, many companies especially the smaller ones fear cost associated with being a public company.

Internal controls are the management set rules or policies that ensure accountability, halt any fraudulent activity, promote efficiency and safeguard the company’s assets. The controls help effective operations. The first basic principle is having enough staff increase productivity and reduce overworking. Secondly, staff training with relevant skills decreases the wastage of resources. Also, the division of roles where the staff is delegated according to their abilities. Record keeping that has the employee’s record, register of stocks. The fifth is the ready books for internal controls that are up to date. The institution should ensure that there are rotation and division of roles thus avoiding fraud and prolonged errors. Finally control accounts and regular internal audits that check how accurate the books are.



Blokhin, A. (2020, January 29). The Impact of the Sarbanes Oxley’s Act of 2002. Retrieved from

Blokhin, A.(2020, January 29). The Sarbanes-Oxley’s and its Effect on Investor Confidence (n .d). Retrieved from Oxley’s-act-and-its-effect-on-investor

Yimam, D., & Fernandez, E. B. (2016). A survey of compliance issues in cloud computing. Journal of internet services and applications, 7(1). doi: 10.1186/s13174-016-0046-8