Sarbanes-Oxley Act

The laws have been imposed to improve the level of corporate responsibility that is necessary to do business in the new global market. On July 30, 2002 President Bush signed the Sarbanes-Oxley Act of 2002. The new rules imposed will change the way "big business" is operated in the public spotlight. The effects of the Sarbanes-Oxley Act of 2002 will greatly impact businesses by the way their relationship is conducted with their lawyers and CPA's and encourage corporate responsibility in a positive way. This change is necessary to boost the economy and increase the public's opinion from the negative picture of what really happened at Enron.
             Enron was the largest scandal that was viewed in the "public eye." Enron was a giant energy corporation that was involved in the scandal with its accounting firm, Arthur Anderson, and their law firm, Vinson & Elkins. Prior to reporting a negative financial report for their customer Enron, CPA's at the firm Arthur Anderson received orders from Enron's legal staff to destroy financial documents that would report the company's shortcomings. The destruction of the financial information took several weeks to conclude. Subpoenas were issued on November 8, 2001, and there is speculation that some "paper shredding" took place after that date as well (Kadlec, 2002). This action of destroying the financial reports was repeatedly reminded by the supervisors and managers at Arthur Andersen. These actions have come to effect different people in many ways. People were affected by loss of jobs, loss of pension savings, and individual investors who owned stock in the company lost significant losses as well. The investigation was trying to prove four questions:.
             i. "Were Enron's partnerships with shell corporations designed to hide its liabilities and mislead investor's?" (Kadlec, 2002).
             ii. "Was evidence intentionally or negligently destroyed?" (Kadlec, 2002).
             iii. "Did Enron executives" political contributions and the access that the contributions won them result in any special favors?" (Kadlec, 2002).