Last week, we concluded our discussion of the Enron accounting scandal. We noted that commercial interest took precedence over allegiance to professional integrity and that the Enron case was the biggest audit failure in American history. As a result of this and other similar scandals occurring around the same time, the United States Government passed the Sarbanes-Oxley (SOX) Act of 2002 to restore the reliability of the public company audit process by, among others, prohibiting auditors from rendering consulting services for the company they are at the same time auditing. The key requirements of SOX are:
● Creation of the Public Company Accounting Oversight Board (PCAOB) to provide for an independent