An Accountant’s Defining Moments: Questionable Corporate Practices Before & After the Sarbanes-Oxley Act of 2002

The image of corporations that were once held in high regard because of their power and profits has been damaged recently by alarming news stories about dishonesty and corruption at their highest levels. In an effort to address public concerns brought about by the dominant headlines of Enron, WorldCom, Xerox, Andersen, Adelphia, Tyco, and Global Crossing, among others, Senator Paul Sarbanes and Congressman Mike Oxley were instrumental in developing a host of laws to strengthen corporate accountability. Signed into law by President George W. Bush on July 30, 2002, the bill, the Sarbanes-Oxley Act of 2002, among other things creates an oversight board to monitor the accounting industry, toughens penalties against executives who commit corporate fraud, and increases the authority and funding of the Securities & Exchange Commission (SEC). For the purposes of this study, a survey of accounting professionals was conducted. Using the survey results, this article will address issues in corporate America surrounding fraud, waste, and abuse by business leaders, and the concealment of such by the accountants charged with keeping them in check. The article also addresses issues and considerations leading up to the Sarbanes-Oxley Act of 2002 and the new rules for corporate accounting and reporting in America