The Sabanes-Oxley Act of 2002, Section 302: What are good disclosure controls and procedures

Like the Securities Act of 1933 and the Securities Exchange Act of 1934, which were passed in reaction to the Great Crash of 1929, the Sarbanes-Oxley Act, or SOX, was a
reaction. It was Congress's reaction, in mid-2002, to the seemingly endless financial and management scandals that were then coming to light, including the collapse of Enron and, even more dramatic, the collapse of Worldcom.

Faith in the transparency of the U.S. securities markets was shaken. With SOX, Congress tried to remedy the damage that had been caused to investor confidence by passing a comprehensive law to increase the accuracy, level of disclosure, and ultimately the credibility of corporate financial reporting. You have to remember that securities are not like other assets like a car, or a house. It's just paper, backed up by faith and the legal system.

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