Which U.S. act requires publicly held companies to establish internal controls for financial reporting?

The Sarbanes-Oxley Act (SOX) is designed specifically to protect investors by improving the accuracy and reliability of corporate disclosures. One of the key provisions of SOX is the requirement for publicly held companies to implement internal controls for financial reporting. This act mandates that companies establish, maintain, and report on the effectiveness of these internal controls, which help prevent fraud and ensure the integrity of financial statements.

By imposing strict compliance standards and holding corporate executives accountable for the accuracy of financial reports, SOX enhances the transparency of financial reporting. This was particularly vital in the aftermath of major corporate scandals that shook investor confidence in the early 2000s. The ongoing requirement for regular assessments and audits of these internal controls helps protect stakeholders and promotes overall corporate responsibility in financial reporting.

While the other acts listed play important roles in shaping financial regulations and protecting investors, they do not specifically mandate the establishment of internal controls for financial reporting in the same way that SOX does.