What was the primary goal of the Sarbanes-Oxley Act of 2002?

The primary goal of the Sarbanes-Oxley Act of 2002 was to protect investors from fraudulent activities. This legislation was enacted in response to major corporate scandals, including those involving Enron and WorldCom, which eroded public confidence in the integrity of financial reporting. The act introduced stringent reforms to enhance transparency in financial reporting and established new standards for corporate governance.

By requiring stricter internal controls and regular audits, the Sarbanes-Oxley Act aims to deter and penalize corporate fraud, ensuring that companies provide accurate and honest financial information to their investors. This helps to safeguard investors’ interests and restore trust in the financial markets, ultimately fostering a more stable and reliable investing environment.