What federal law established new requirements for US public company boards and added criminal penalties?

What federal law established new requirements for US public company boards and added criminal penalties?

• A. Sarbanes Oxley
• B. FMLA
• C. HIPAA
• D. ACA

Answer: (A)

The Sarbanes-Oxley Act is the federal law that established new requirements for U.S. public company boards and introduced criminal penalties for violating those regulations. This legislation was enacted in response to major corporate scandals in the early 2000s, such as those involving Enron and WorldCom, which exposed significant flaws in financial reporting and corporate governance. The primary purpose of Sarbanes-Oxley is to protect investors by improving the accuracy and reliability of corporate disclosures. It mandated various reforms, including stricter oversight of public accounting firms, enhanced financial disclosures, and the establishment of internal controls to prevent fraud. Importantly, the law also increased penalties for corporate fraud, thereby deterring unethical behavior and promoting greater accountability among management and boards of directors. In contrast, the Family and Medical Leave Act (FMLA) focuses on employee rights related to family and medical leave, and not corporate governance. The Health Insurance Portability and Accountability Act (HIPAA) deals with healthcare privacy and security, governing how personal health information is managed. The Affordable Care Act (ACA) centers on reforming healthcare access and costs, unrelated to corporate governance issues. Therefore, the Sarbanes-Oxley Act stands out as the legislation relevant to the governance and

The Sarbanes-Oxley Act is the federal law that established new requirements for U.S. public company boards and introduced criminal penalties for violating those regulations. This legislation was enacted in response to major corporate scandals in the early 2000s, such as those involving Enron and WorldCom, which exposed significant flaws in financial reporting and corporate governance.

The primary purpose of Sarbanes-Oxley is to protect investors by improving the accuracy and reliability of corporate disclosures. It mandated various reforms, including stricter oversight of public accounting firms, enhanced financial disclosures, and the establishment of internal controls to prevent fraud. Importantly, the law also increased penalties for corporate fraud, thereby deterring unethical behavior and promoting greater accountability among management and boards of directors.

In contrast, the Family and Medical Leave Act (FMLA) focuses on employee rights related to family and medical leave, and not corporate governance. The Health Insurance Portability and Accountability Act (HIPAA) deals with healthcare privacy and security, governing how personal health information is managed. The Affordable Care Act (ACA) centers on reforming healthcare access and costs, unrelated to corporate governance issues. Therefore, the Sarbanes-Oxley Act stands out as the legislation relevant to the governance and