In 2001, we witnessed two major corporations, Enron and WorldCom, going bankrupt because executive management was egregiously manipulating financial statements. The impact on the U.S. economy was massively detrimental. As a result, the U.S. Security and Exchange Commission (SEC) drafted the Sarbanes-Oxley Act of 2002 (SOX) to protect against such fraudulent activities. However, it took years for the economy to recover.
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