In July 2002, following the collapse of Enron and WorldCom, President George W. Bush signed legislation widely known as the Sarbanes-Oxley Act of 2002 (or SOX) that is viewed as landmark legislation to strengthen financial reporting and corporate governance in U.S. capital markets. The Sarbanes-Oxley Act introduced major changes to the regulation of financial practices of publicly traded companies that set new or expanded requirements for boards of directors and audit committees, management, and the public accounting firms that audit the company’s financial statements.
This legislation was enacted in response to a number of major corporate accounting scandals that cost investors billions of dollars and threatened public confidence in U.S. securities markets. SOX created the Public Company Accounting Oversight Board (the PCAOB) that is charged with overseeing and regulating accounting firms that serve as auditors of public company financial statements. Former Senator Paul Sarbanes died on December 6, 2020 in Baltimore. He was preceded in death by Representative Mike Oxley who died January 1, 2016.
Mark Beasley, Professor of Accounting and Director of the ERM Initiative at NC State, had the opportunity to moderate a live discussion between former Senator Paul Sarbanes and Representative Mike Oxley on July 30, 2012, which marked the 10th anniversary to the day of the signing by President Bush of the Sarbanes-Oxley Act of 2002. Senator Sarbanes and Representative Oxley provided insights about the legislation and their assessments of the effectiveness of the Act, and they shared thoughts about visions for the future. Here is a link to that discussion.
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