Business Studies

The Sarbanes-Oxley Act of $$2002$$ made it important for businesses to have an _______________.


ANSWER

Ethics code


SOLUTION
In the United States of America, Section $$406$$ of the Sarbanes Oxley Act, $$2002$$ requires public companies to disclose whether they have codes of ethics, and also to disclose any waivers of those codes for certain members of senior management. Section $$406(a)$$ of the Regulation requires companies to disclose:
 — whether they have a written code of ethics that applies to their principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions;
 — any waivers of the code of ethics for these individuals; and
 — any changes to the code of ethics.
If companies do not have a code of ethics, they must explain why they have not adopted one. A company may file its codes as an exhibit in the annual report, post the codes on the company's website, or agree to provide a copy of the codes upon request and without charge.
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