Which act was passed by the US Congress in 2002 to protect investors from corporate misinformation?

• A. Dodd-Frank Act
• B. Gramm-Leach-Bliley Act
• C. Sarbanes-Oaxley Act
• D. Foreign Corrupt Practices Act

Answer: (C)

Financial reporting integrity and investor protection are at the heart of this item. After scandals like Enron and WorldCom, Congress acted in 2002 to ensure corporations report accurately and that those reports are properly verified. The Sarbanes-Oxley Act was enacted to strengthen how public companies disclose their finances and to hold those responsible accountable. It created the Public Company Accounting Oversight Board to oversee audits, and it requires top executives to personally certify the accuracy of financial statements and to take responsibility for the effectiveness of internal controls over financial reporting. It also enforces auditor independence, expands penalties for fraud, and requires enhanced disclosures, including management’s assessment of internal controls. All of these measures are aimed at reducing misinformation and giving investors reliable information to base their decisions on.

Other laws listed address different issues or came in different years. The Dodd-Frank Act comes later, in 2010, focusing on broader financial-system reforms after the 2008 crisis. Gramm-Leach-Bliley Act, enacted in 1999, centers on financial-services modernization. The Foreign Corrupt Practices Act, from 1977, targets anti-bribery and the maintenance of accurate books and records for foreign operations.