Which act was implemented to establish regulations for corporate financial disclosures?

The Sarbanes-Oxley Act of 2002 was implemented in response to a series of high-profile financial scandals that shook investor confidence in the integrity of financial reporting. This act established stringent regulations aimed at improving the accuracy and reliability of corporate disclosures. Key provisions of the Sarbanes-Oxley Act require companies to implement robust internal controls and procedures for financial reporting, which are designed to prevent fraudulent financial practices and enhance transparency.

The act also holds executives personally accountable for the accuracy of the financial statements, imposing severe penalties for fraudulent misrepresentation. By reinforcing corporate governance and requiring more rigorous oversight of financial reporting practices, the Sarbanes-Oxley Act has played a crucial role in restoring investor trust and ensuring greater accountability in the financial sector.