Challenges for Brazilian companies in the implementation of the Sarbanes-Oxley Law

Luciana de Almeida Araújo Santos, Sirlei Lemes


In the last decade of the 20th century, the US economic scenario was facing a crisis as a consequence of situation of the stock market, which had been shaken by the serious accounting scandals involving companies such as Enron and WorldCom. The credibility crisis in the stock market and the investors’ distrust grew to such an extent that the American authorities unanimously approved the implementation of a new legislation: the Sarbanes-Oxley Law. Its main goal was to recover the credibility of the stock market, avoiding the occurrence of new errors, such as the ones that had contributed to the bankruptcy of large companies. For that purpose, in order to prevent frauds, the law created a new environment of corporate governance and a new set of responsibilities and sanctions for managers. This paper discusses that new legislation, which is still poorly analyzed in Brazil, although all Brazilian companies with stocks negotiated at the American stock exchange have already initiated the process of adjustment to its requirements. It also presents, by means of a bibliographical overview, the main points of convergence and divergence of the Brazilian legislation in relation to the Sarbanes-Oxley Law. The results indicate that there are significant differences between the two legislations.

Key words: Sarbanes-Oxley Law, accounting frauds, credibility.

ISSN: 1984-8196 - Best viewed in Mozilla Firefox

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