Report on Sarbanes-Oxley Act after one year
14 Sep 2003
The US House of Representatives Committee on Financial Services has released a report reviewing the impact of the Sarbanes-Oxley Act of 2002.
The report, Rebuilding Investor Confidence, Protecting U.S. Capital Markets (PDF 891k) explores the impact of the Sarbanes-Oxley Act of 2002 one year after its enactment.
A section of the report reviews how the Act has begun to create "a level playing field for international companies and auditing firms", including a review of steps taken by the European Commission.
The report also includes a summary of the findings of a study by Huron Consulting Group of restatements of financial statement filed with the Securities and Exchange Commission. For the 12 months ended 30 June 2003, 354 public companies restated earnings because of accounting errors. Of those, 158 restatements were filed during the first six months of 2003. Problems applying accounting rules, human and system errors, and fraudulent behaviour were the three primary causes for accounting restatements.
