Which act is primarily associated with corporate governance and financial reporting obligations for publicly traded companies?

Which act is primarily associated with corporate governance and financial reporting obligations for publicly traded companies?

• A. HIPAA
• B. Gramm-Leach-Bliley Act (GLBA)
• C. Sarbanes-Oxley (SOX)
• D. FERPA

Answer: (C)

Sarbanes-Oxley is the act tied to corporate governance and financial reporting obligations for publicly traded companies. It was created to restore investor confidence after major corporate scandals by tightening how financial information is controlled and disclosed. The law requires senior executives to personally certify the accuracy of financial statements, strengthens the duties of the board and its audit committees, and mandates robust internal controls over financial reporting with management’s assessment and independent attestation of those controls. It also established the Public Company Accounting Oversight Board to oversee audits and impose stricter penalties for fraudulent financial activity. The other laws mentioned address different areas—HIPAA covers health information privacy, GLBA protects consumer financial data at financial institutions, and FERPA guards student education records—so they’re not focused on the governance and reporting framework for public companies in the same way.