Remember Houston-based Enron?
Legions of Americans do, of course, particularly many thousands of Texas residents and workers who were intimately affected by the collapse of that giant energy/services company a generation ago.
Enron’s sudden and dramatic plummeting owed centrally to accounting fraud on a vast scale. The scandal ushered in huge regulatory changes focused on accountability and shored-up enforcement mechanisms against corporate malfeasance.
The enactment of the Sarbanes-Oxley Act in 2002 was one key response to Enron’s fall and widespread accounting irregularities in many other large companies. That legislation introduced detailed changes governing accounting rules and company disclosures of financial information to the public.
Notably, Hilder & Associates attorneys played a key role in the accounting-linked legal changes. We duly note on our website that the firm “represented the Enron whistleblower, Sherron Watkins, who was the catalyst for the legislation.”
One material outcome of Sarbanes-Oxley was the establishment of the Public Company Accounting Oversight Board. The PCAOB is a nonprofit group overseen by the U.S. Securities and Exchange Commission. It was created specifically to monitor accountants providing auditing services to America’s publicly traded companies. An overview of the PCAOB stresses that the entity’s core purpose “is to minimize audit risk.”
Accounting firms that provide services to public companies must register with the PCAOB and follow its strict auditing guidelines. The PCAOB has ample discretion to inspect company audits, as well as to impose civil penalties on firms that it concludes have engaged in wrongdoing.
Individuals or commercial entities having questions regarding the PCAOB, Sarbanes-Oxley compliance or any other securities-linked legal matter can contact a proven securities law firm for guidance and, when necessary, diligent representation.