Sox Case

In my diploma essay I would like to present the importance of the Sarbanes-Oxley Act and show how US companies must comply with it.

The Sarbanes-Oxley Act as a federal US law is considered an important piece of legislation because it is designed to prevent financial fraud.

This act was a direct response to corrupt accounting practices committed by Enron, Tyco and WorldCom.

Perhaps no other company is more synonymous with shady financial practices than Enron. The Texas energy business inflated its earnings and stock prices while senior executives moved company money into their offshore accounts. Enron eventually fell into bankruptcy. The financial scandal behind Enron's misrepresentation of earnings and losses began in October 2001. The Tyco and WorldCom scandals emerged in 2002, creating distrust among the public, investors and stakeholders. The Sarbanes-Oxley Act of 2002 is mandatory. All organizations, large and small, must comply.

The legislation is designed to ensure that company financial statements are accurate and free of misleading information. Under this law, senior officers also must create internal guidelines to ensure the accuracy of their financial reports.

I would like to present theoretical background of this topic as well as the experience in practice at the Celanese Corporation.

My goal is to show what SOX means in the "life" of a US company, how the leadership and how each employee has to work with it.

Identification of problems regarding this subject:

1. Celanese businesses globally are impacted by this US legislation.

- How do these controls affect the workflow?

2. How does Celanese comply with the SOX controls?

- Section 404 of the Sarbanes-Oxley Act requires company management to create an adequate internal control structure for financial reporting. Presenting all documentation is very time consuming.

3. How does each employee comply with SOX?

- actively seek to understand the controls in place in their area

- consistently adhere to established control standards

- identify areas where organizational or functional change may have compromised controls

- maintain a close dialog with the leaders about issues regarding controls

4. Does Celanese have all the elements of an effective control environment?

- Integrity and ethical values

- Commitment