Wednesday, September 06, 2006
Sarbanes-Oxley is a set of regulations for publicly traded companies created in 1992 by Senators Sarbanes and Oxley, in response to a major, major scandal, in which several publicly traded companies stole a lot of money from their shareholders. They did this through accounting fraud and off-the-balance-sheet transactions. Their deceptive financial statements led shareholders to buy stock, thinking that they are investing in thriving businesses. Unfortunately, these companies were in such poor shape financially that they eventually filed for bankruptcy. Their shareholders were completely blindsided.
The fraudulent companies had external auditors. Arthur Anderson, one of the "Big Five" accounting firms, was convicted of obstruction of justice for destroying documents pertinent to the prosecution. Because of this, the "Big Five" have since been reduced to the "Big Four."
Several large companies were undone. Enron, the largest of the culprits, filed for bankruptcy in December 2001. Several former high level executives from several companies were prosecuted. The total damage done to the shareholders measured in the billions.
The fraudulent companies had external auditors. Arthur Anderson, one of the "Big Five" accounting firms, was convicted of obstruction of justice for destroying documents pertinent to the prosecution. Because of this, the "Big Five" have since been reduced to the "Big Four."
Several large companies were undone. Enron, the largest of the culprits, filed for bankruptcy in December 2001. Several former high level executives from several companies were prosecuted. The total damage done to the shareholders measured in the billions.
# posted by Shapi @ 9:03 AM 
