More than 350 students, faculty and business professionals gathered on the campus of Towson University yesterday, as former U.S. Senator Paul Sarbanes (D-Maryland) took the podium in the University Union to discuss his watershed Sarbanes-Oxley Act and its continually rippling effects.
Hosted by Beta Alpha Psi-Iota Zeta, the Department of Accounting and the College of Business and Economics, the panel discussion provided an opportunity for attendees to network, meet Sen. Sarbanes and hear his behind-the-scenes account of drafting the historic Sarbanes-Oxley Act 11 years ago.
Inspired by a pattern of accounting scandals that included the infamous Enron and Worldcom cases, the landmark bipartisan legislation set new federal law to enhance accuracy standards for all public U.S. companies and increase the severity of penalties for fraud. Specifically, the law required that CEOs and CFOs of public companies sign off on all financial statements for their companies, holding them accountable for accurate and inaccurate reporting. The Public Company Accounting Oversight Board was also created to oversee audits.
Named after Sarbanes and U.S. Representative Michael G. Oxley (R-Ohio), “SOX” dynamically changed the assessment of internal controls for public companies and auditors, and impacted the independence and quality requirements for audit engagements.
“If you Google the word ‘SOX,’ the Sarbanes-Oxley Act comes up first, before the Red Sox and the White Sox,” said Aru Rao, Towson professor and Beta Alpha Psi adviser, in her introduction.
Sarbanes shared his motivation to draft the legislation, where the law stands today and its dramatic impact on the accounting profession to an audience that included Towson faculty, the university president, accounting professionals and students from Towson and other local universities.
“Through this whole process, I took away a deep appreciation for how important the accounting and auditing professions are in making the entire economic system work in an ethical and transparent way,” said Sarbanes. “I hope you understand the central role you play in our economy.”
The discussion was moderated by Norma Holter, a TU accounting professor, and included the following panelists: Kenneth Denski, SC&H Group, LLC; Bill Dockman, W.R. Grace; Steve Kroll, PCAOB; and Hugh Mohler Jr., KPMG—Baltimore.