The Sarbanes-Oxley Act Overview: The development of the Sarbanes-Oxley Act (SOX) was the result of public company scandals. The Enron and Worldcom scandals, for example, helped undermine investor confidence in publicly traded entities during 2001 and 2002. Congress quickly responded to the political crisis and "enacted the Sarbanes-Oxley Act of 2002 , which was signed into law by President Bush on July 30" (Edward Jones, 1), to restore investor confidence. Under SOX, sanctions would be imposed on unethical or law-abiding public companies and their officers, directors, auditors, lawyers, and financial analysts (1). SOX has significantly transformed the procedures in which public companies manage internal controls and reporting in accounting and finance and the management aspects of public companies (2). Among SOX's many goals, the most important one is to oversee public accounting, publicly reporting companies, and the investment industry; however, SOX needed assistance to pursue these goals: To better observe public accounting actions, SOX established the Public Company Accounting Oversight Board. This council oversees the accounting profession and public reporting firms with respect to audits and other reports. It also created rules to ensure that company auditors reporting to the public are independent of the companies for which they report (3). Employees of the Public Company Accounting Oversight Board (PCAOB) are required to have no direct relationship with public companies and/or company employees in order to keep all terms of accountability fair. Title I of the Sarbanes-Oxley Act describes the rom… middle of paper… For companies that may already have a code of ethics and have exceeded the standards required by SOX, they are at an advantage ; However, with the increased cost of following appropriate auditing standards and the cost of establishing the code of ethics, the PCAOB has the ability to significantly reduce the revenue of public companies and accounting firms. Works Cited 2002 AICPA. How the Sarbanes-Oxley Act of 2002 Affects the Accounting Profession.August 30, 2002. April 14, 2005.2004 Public Company Accounting Oversight Board. PCOAB: Restoring Trust. Annual Report 2003. Bethesda, MD: Design: Financial Communication Inc. June 2004Miller, Richard I. and Pashkoff, Paul H. Regulations Under the Sarbanes-Oxley Act:Journal of Accountancy. October 2002.Weaver, David R, Esq. The Sarbanes-Oxley Act: AN OVERVIEW. Edward Jones. July 1st 2004.