In July of 2002, the Public Company Accounting Reform and Investor Protection Act was enacted by the US Congress. At that time in history, there had been many scandals, one of the more well-known ones being Enron. This act brought new rules and regulations among companies and their accounting.
- Corporate leaders were required to personally certify how accurate their company's financials were
- There were reinforced auditor reporting duties
- Restrictions were made preventing auditing firms from providing non-audit related services to companies that their audit
- Provisions were also put in place to prevent corporate analysts from benefiting from conflicts of interest
- Public disclosure of any potential conflicts of interest was not allowed
2 comments:
I think having that situation with Enron probably was a lesson learned. The fact that they started looking more into things like that really was good for trying to have something like that occur again.
Was this essentially enacted do you think so that CEOs like the CEO of Enron could clearly be charged with something, whereas before it hadn't been all that clear as to whether he/she was doing something illegal or just shady?
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