FRM Financial Risk Manager Practice Test

The Sarbanes-Oxley Act of 2002 is a federal law enacted to respond to major corporate and accounting scandals, including the Madoff’s Ponzi scheme, the Enron debacle, and the WorldCom collapse. The act oversees, regulates, inspects, and disciplines accounting firms; and covers issues such as auditor independence, corporate governance, and enhanced financial disclosure.

Key Takeaway: The enactment of the Sarbanes-Oxley Act shows the effort of the government to prevent financial losses and maintain public confidence in the national securities market.