TExES Business and Finance 6-12 (276) Secrets Study Guide by TExES Exam Secrets Test Prep Staff

Author:TExES Exam Secrets Test Prep Staff
Language: eng
Format: epub
Publisher: Mometrix Media LLC

Sarbanes-Oxley Act and Bankruptcy Reform Act of 2005

Two acts that played a large part in business were the Sarbanes-Oxley Act and the Bankruptcy Reform Act of 2005. The Sarbanes-Oxley Act was signed by President George W. Bush in 2002 and increased corporate responsibility and financial disclosure while fighting accounting and corporate fraud. It included new or improved standards for management firms, public accounting firms, and United States public company boards. It also led to the creation of the Public Company Accounting Oversight Board (PCAOB), which oversees auditing professionals. It was created in an effort to prevent corporate scandals at a time when such scandals were becoming common. It also made some types of misconduct crimes. The Bankruptcy Reform Act of 2005 was created to lower Bankruptcy Code filings. Parties filing for bankruptcy would now need to get financial counseling first. In addition, they would have to undergo a “means test” to see if they qualified. Filers had to wait eight years before using Chapter 7 bankruptcy again. In addition, it created a limit of $125,000 for homestead exemptions if the property was acquired within three years and a weakened automatic stay for multiple filers. This made it more difficult for people to file for Chapter 7 bankruptcy.

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