SOX was enacted because of which of the following?

The Sarbanes-Oxley Act (SOX) was enacted in response to a series of high-profile financial scandals that highlighted the need for greater transparency and accountability in financial reporting. Each of the factors listed plays a significant role in the context of why SOX was established.

Poor financial controls contributed to the inability of companies to reliably report their financial condition. Without robust internal controls, there was a higher likelihood of errors and fraudulent activities going undetected.

The lack of independent audits was also a critical issue that SOX sought to address. Prior to the act, many companies experienced conflicts of interest where auditing firms had significant relationships with the companies they were auditing, which could compromise the independence and objectivity of the audit process.

Similarly, the lack of proper oversight by the Board of Directors (BOD) allowed questionable financial practices to persist unchecked. Stronger oversight is necessary to ensure that companies adhere to ethical practices and maintain reliable financial reporting.

By tackling these issues collectively, SOX aimed to restore public confidence in the financial reporting of corporations, making the inclusion of all these factors essential to understanding the rationale behind the legislation. Therefore, the correct answer encompasses all these critical aspects that led to the enactment of SOX.