Audit Of Public Companies

November 18, 2005

The financial and accounting scandals at major public companies such as Enron and  WorldCom precipitated the enactment of the Sarbanes-Oxley Act of 2002 (“SOX”).  Congress, governmental regulators and the public at large were shocked by what appeared to be a continuous stream of public companies who, one after another, disclosed serious financial problems that jeopardized their very existence – problems that had not been at all apparent from their audited financial statements and periodic reports filed with the SEC.  Shareholder value plummeted; chief executive officers and chief financial officers came under fire; the independence of the public accounting firms who audited these companies was questioned; and a common refrain was heard.  “Where were the directors of these companies, elected by shareholders to oversee and protect shareholder interests, and why didn’t they do anything to prevent these scandals?”  

Audit Of Public Companies