What was the purpose of the Sarbanes-Oxley Act of 2002?

The Sarbanes-Oxley Act of 2002 was enacted primarily to increase corporate financial accountability and restore investor confidence following a series of major corporate and accounting scandals. This legislation aimed to introduce stringent reforms to enhance the accuracy and reliability of corporate disclosures. By imposing higher standards for all U.S. public company boards, management, and public accounting firms, the act sought to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise.

Companies are now required to implement more comprehensive internal controls on financial reporting and to properly disclose the financial condition of the company. This establishes a framework for transparency and holds corporate executives accountable for the information their companies report, which is a cornerstone of financial integrity.

The other options, while they represent important areas of public policy, do not align with the intentions of the Sarbanes-Oxley Act, which is specifically focused on corporate governance and financial practices rather than education, transportation safety, or healthcare regulation.