It basically makes the Officers of a company responsible both financially and legally for the companies reporting and operations, punishable by prison and fine if found to be false. It also separates the auditors and other services that a accounting firm may provide to a company so that collusion and fraud is more difficult to perform by both the auditors, management and consultants.
In fact Sarbanes-Oxley Act is also recognized as Public Company Accounting Reform and Investor Protection Act of 2002. It is an act of United States Federal Law. It was anacted on July 30, 2002. The creation of this act was based on the corporate and accounting scandals of Enron, Worldcom and many other companies. This Sarbanes-Oxley Act describes 11 approaches to financial reporting. These approaches include Public Company Accounting Oversight Board (PCAOB), auditor independence, corporate responsibility, enhanced financial disclosures, analyst conflicts of interest, commission resources and authority, Studies and Reports, corporate and criminal fraud accountability, white collar crime penalty enhancement, corporate tax returns and corporate fraud accountability.
Now most of the people argue that Wall street crisis is because of deregulation. Sarbanes-Oxley Act is the financial regulatory act in US, therefore, people discuss about it.
I can't quote chapter and verse as some others here can, but this is what I've heard about it. As I understand it, the requirement that the value of bad loans be reported as it is means they can't be moved the way they might be normally.
