Which act was passed by the U.S. Congress in 2002 to protect investors from fraudulent accounting activities?

The Sarbanes-Oxley Act, passed in 2002, aimed to enhance corporate governance and financial practices, specifically addressing issues of financial fraud and accounting errors that were highlighted by major corporate scandals, such as Enron and WorldCom. This legislation introduced rigorous standards for all U.S. public company boards, management, and public accounting firms. It established requirements for financial disclosures, making it mandatory for companies to provide accurate financial information and adhere to strict auditing processes.

Key provisions of the Sarbanes-Oxley Act include the establishment of the Public Company Accounting Oversight Board (PCAOB), enhancements to the accuracy of financial reporting, and increased penalties for fraudulent financial activity. It also gave more power to the audit committees of companies and laid out measures to protect whistleblowers who report fraudulent activities.

Other options like the Consumer Protection Act and the Investment Security Act focus on different aspects of financial regulation and consumer protection, rather than specifically addressing corporate accounting and fraud like the Sarbanes-Oxley Act does. The Financial Accountability Act does not exist as a widely recognized piece of legislation related to this context, making the Sarbanes-Oxley Act the most relevant and correct answer.