What type of accounting improves due to requirements set by the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act (SOX) was enacted in response to corporate scandals and aims to protect investors by improving the accuracy and reliability of corporate disclosures. Financial accounting specifically relates to the reporting of an organization's financial information, adhering to standardized guidelines and regulations. Under SOX, companies are mandated to implement stricter internal controls over financial reporting, enhance transparency, and ensure the integrity of financial statements. This legislation requires organizations to document and test their internal controls, establish procedures that promote accurate financial reporting, and conduct independent audits to verify compliance.

These improvements in financial accounting help to assure stakeholders that the financial information presented is accurate and free from fraud, thus increasing investor confidence in financial markets. It is this direct relationship between the requirements of the Sarbanes-Oxley Act and the rigor for financial accounting practices that makes financial accounting the correct answer. Other types of accounting, while important, are not directly influenced by the standards set forth by SOX.