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APPLICATION SARBANES OXLEY ACT IN THE CZECH CONDITIONS
Abstract
The paper is focused on problems connected with the application of special law called Sarbanes Oxley Act by the companies in the Czech Republic. The mentioned law regulates issue of internal control in enterprises that could ensure true and fair view of the presented financial statements. This legislation was created in response to bankruptcy of a lot of large companies in the USA at the beginning of the 21st century such as Enron, Parmalat, Tyco etc. that overestimated their financial results. This act has a lot of positives but on the other hand its implementation in the business environment costs a lot of money. It must by complied by all companies that are listed on stock exchanges in the United States of America. In general it means all firms from the USA and their subsidiaries all over the world have duty to implement the special tools to their firm to ensure better informative value of financial accounting. Due to this implementation companies must spend significant financial resources and it affects their profitability negatively. These companies are in a disadvantageous position compared to their competitors from abroad due to higher costs spent on internal control and it decreases their competitiveness. The main goal of the paper is to analyse if the costs of implementation of Sarbanes Oxley Act into the business environment are as high as the critics of this law claim or not. The analysis will be made on the data obtained by the Czech companies owned by the American parent companies.
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References10
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