Critique of the Sarbanes Oxley Act
Following a turbulent few years in the accounting world President Bush signed the Sarbanes-Oxley Act into effect in 2002. The Sarbanes-Oxley Act was essentially created to curb unethical business practices, eliminate fraud in the accounting industry and help restore investor confidence in the investment world. The Public Company Accounting Oversight Board (PCAOB) is the brawn behind the Sarbanes-Oxley Act. ... The Sarbanes-Oxley Act also forces added duties upon audit committees. Before Sarbanes-Oxley, auditors reported to management of their companies, which was not always good because management has a vested interest in how well a company is or is not doing. ... The act also states that the auditor cannot offer certain non-audit services such as bookkeeping, information systems design, appraisals or valuation services, etc.