Electronic Case - It's a New World

Sarbanes-Oxley Act

As you surely have noticed, accounting is in the news. For months now, accounting stories have fascinated, perplexed, and even stunned us. As a result of the events behind these stories, the accounting profession and our economy itself will never be the same.

The Enron fiasco and other infamous accounting failures of the past four years led to a major adjustment to the financial reporting environment. On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002. The most dramatic change to federal securities laws since the 1930s, the Act radically redesigns federal regulation of public company corporate governance and reporting obligations. It also significantly tightens accountability standards for directors and officers, auditors, securities analysts and legal counsel. Here's a summary at the AICPA Web site.

Analysis

• Use Google to find other summaries and discussions of the Act.
• Create a listing and brief description of at least seven major provisions of the Sarbanes-Oxley Act of 2002. Be sure to include the provisions of Section 404.
• Based on the discussions you find during your research and your own reasoning, order your list from most important to least important in terms of the likely long-term impact on the accounting profession and financial reporting.
• What are three ways the Act will affect you personally?
  

Here is the solution to this case.