What legislative act introduced the requirement for companies to submit an annual report regarding their internal controls?

The Sarbanes-Oxley Act of 2002 is significant as it established stringent regulations for public companies in the United States, particularly concerning their financial reporting and internal controls. One of the key elements of this act is Section 404, which mandates that companies must include an assessment of the effectiveness of their internal controls over financial reporting in their annual reports. This requirement was introduced in response to accounting scandals and aims to enhance the reliability of financial disclosures made by corporations, thereby protecting investors and fostering trust in the financial markets. The act emphasizes accountability at the management level and is critical for ensuring that companies adhere to sound practices in financial reporting.