What is the primary purpose of the Sarbanes-Oxley Act of 2002?

The primary purpose of the Sarbanes-Oxley Act of 2002 is to improve and maintain investor confidence through accountability. This legislation was enacted in response to major corporate scandals involving companies like Enron and WorldCom, which highlighted significant weaknesses in corporate governance and financial reporting. The Sarbanes-Oxley Act aims to protect investors by implementing strict reforms to enhance the accuracy and reliability of corporate disclosures.

Key provisions of the Act include increased financial transparency, the establishment of rigorous auditing standards, and the requirement for top management to certify the accuracy of financial information. By holding corporations accountable for their financial practices, the Act fosters greater trust among investors, ultimately supporting a more stable and trustworthy financial market.

The other options do not relate to the fundamental objectives of the Sarbanes-Oxley Act. For instance, it does not focus on tax rates or free trade, nor does it specifically target environmental regulations, which are outside its scope. Thus, the correct choice encapsulates the Act’s essence in reinforcing ethical standards and protecting stakeholders through enhanced accountability.