In reaction to major corporate scandals that rocked the corporate world in 2001 and 2002, Congress passed financial reporting reforms encompassed in the Sarbanes Oxley Act of 2002 (SOX) on July 30, 2002. Shareholder/investor interests needed to be protected, and investor confidence in the public markets needed to be restored. Although the passage of Sarbanes Oxley has restored investor confidence in financial reporting, the high costs associated with SOX compliance has financially strained most small public companies and caused many of them to go into the private sector.
Grinberg, Elina, "The Impact of Sarbanes Oxley Act 2002 on Small Firms" (2007). Honors College Theses. 56.