What does the Sarbanes-Oxley Act aim to achieve?

The Sarbanes-Oxley Act, enacted in 2002, was primarily designed to enhance corporate governance and accountability in response to financial scandals in the early 2000s. The act sets stringent standards for public company management as well as establishing robust requirements around financial disclosures. This includes measures to ensure the accuracy and integrity of financial reporting, thereby aiming to protect investors and restore confidence in the U.S. securities markets.

By imposing strict reforms on all aspects of financial reporting and corporate behavior, the act plays a crucial role in enhancing transparency in the financial practices of publicly traded companies. This helps to prevent fraudulent activities and increases the accountability of top management, including the requirement for CEOs and CFOs to personally certify the accuracy of financial statements.

The other choices do not accurately reflect the primary intention of the Sarbanes-Oxley Act. It is not focused on tax reduction, employee hiring practices, or the regulation of international trade agreements, which are areas that lie outside the realm of corporate financial accountability and governance that the act seeks to address.