Historical frame
- Kind
- law
- Period
- Enacted July 30, 2002
- Jurisdiction
- United States
SOX redistributed public-company reporting accountability among executives, boards, auditors, the PCAOB, the SEC, and recognized accounting standard setters.
Questions to carry forward
- Which responsibilities belong to management, the audit committee, the external auditor, the PCAOB, and the SEC?
- Why is an internal-control report different from the financial-statement audit opinion?
Claim disciplineEvidence boundaries
- SOX responded to multiple reporting and audit failures, not Enron alone, and it did not guarantee the elimination of future misstatement.
Congress enacted SOX after a cluster of reporting collapses and audit failures. The law created the PCAOB, restricted certain auditor relationships and services, assigned responsibilities to audit committees and executives, and expanded internal-control and record-related requirements.
The lesson is institutional, not ceremonial. Management still prepares and owns the statements and controls. The board oversees. The external auditor forms bounded opinions from evidence. The PCAOB registers, sets standards for, inspects, and disciplines public-company audit firms under SEC oversight. Confusing these roles makes accountability look simpler than it is.