The SOX Act

Discussion Post Response #1

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Hi L! Interestingly, you established that the SOX Act derives from the need to restore public trust in companies in the aftermath of corporate accounting scandals involving prominent names such as Enron, WorldCom, Arthur Anderson, and others. In my post, I noted that Enron's financial statement fraud led to a loss of over $78 billion in shareholder value, the corporate failure of Arthur Anderson LLP, as well as a class-action legal suit that amounted to nearly $7.2 billion (Palma et al., 2018). However, my post does not indicate how the passage of the SOX Act led to the establishment of the Public Company Accounting Oversight Board (PCAOB) tasked with setting industry standards, examining fraud allegations, and regulating auditing companies. I