H.R.3763, the Sarbanes-Oxley Act of 2002, signed by President Bush in July 2002, attempts to address many of the issues raised by the recent accounting scandals of Enron and Arthur Andersen.
The Act deals with such issues as auditor independence, director independence, corporate responsibility, financial disclosure, conflicts of interest for directors and attorneys, insider trading, corporate accountability, and internal control and reporting.
Among other things, Sarbanes-Oxley creates an oversight board for accounting firms auditing publicly traded companies. The new law also creates protections for whistleblowers and imposes criminal penalties relating to fraud, conspiracy, and interfering with investigations.
Experts characterize Sarbanes-Oxley as the most sweeping changes since the Securities Acts of 1933 and 1934.