What is the purpose of the Sarbanes-Oxley (SOX) Act?

The Sarbanes-Oxley (SOX) Act was enacted in response to significant corporate scandals in the early 2000s, with the primary aim of protecting investors by improving the accuracy and reliability of corporate disclosures. This legislation introduces strict reforms to enhance corporate governance and accountability, thereby ensuring that companies provide stakeholders with clear and trustworthy financial information.

The key focus of the SOX Act is on preventing fraudulent financial reporting, which can mislead investors and distort the market's perception of a company's performance. By mandating stricter financial practices, such as the requirement for executives to certify the accuracy of financial statements and the establishment of internal controls, the act directly addresses issues of corporate fraud and helps safeguard the interests of investors.

While the other options may relate to various aspects of business and investment, they do not align with the main objectives of the SOX Act, which is specifically centered on protecting investors against financial misrepresentation and enhancing the overall integrity of financial reporting in publicly traded companies.