SOX and Standard Setting

question 27

Essay

SOX and standard setting
After several highly publicized accounting scandals in the U.S. such as Enron, Sunbeam, and WorldCom, all of whom, coincidentally, were clients of the former public accounting firm of Arthur Andersen, the U.S. regulators enacted the Sarbanes-Oxley Act (SOX). Pressure was put on Canada to follow a similar course. Explain what Canada has done to make public companies more accountable.

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Definitions:

Comparison Level For Alternatives

A standard by which an individual evaluates the attractiveness of alternative groups or relationships based on past experiences or expectations.

Similarity Principle

The similarity principle posits that individuals are more likely to form and maintain relationships with others who are similar to them in various aspects.

Complementarity Principle

A concept suggesting that relationships are strongest and most stable when partners possess traits that complement or enhance each other's abilities or characteristics.

Group Formation

The process by which individuals come together to form a group, often going through various stages of development such as forming, storming, norming, and performing.