The Sarbanes-Oxley Act of 2002 is a federal law passed by the U.S. Congress to help protect investors from fraudulent financial reporting by corporations. The act was named after its two sponsors, Senator Paul S. Sarbanes (D-Md.) and Representative Michael G. Oxley (R-Ohio) . The act was created in response to financial scandals in the early 2000s involving publicly traded companies such as Enron Corporation, Tyco International plc, and WorldCom. The act established strict new rules for accountants, auditors, and corporate officers and imposed more stringent record-keeping requirements. The act also added new criminal penalties for violating securities laws. The Sarbanes-Oxley Act is arranged into 11 sections, or titles, and contains provisions affecting corporate governance, risk management, auditing, and financial reporting of public companies. The act mandates certain practices in financial record-keeping and reporting for corporations. The act increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements. The act also created the Public Company Accounting Oversight Board (PCAOB), which oversees the audits of public companies that are subject to the securities laws. The PCAOB sets standards and rules for audit reports and investigates and enforces compliance at the registered accounting firms. The primary aim of the act was to prevent a firms management from interfering with an independent financial audit. The act has been criticized for being costly and burdensome for companies to comply with, but studies have shown that it improves financial reporting and restores investor confidence.