Accounting reform law signed

Northwestern Financial Review, Aug 15-Aug 31, 2002

President Bush has signed into law the Accounting Industry Reform Act. The legislation is intended to rein in corporate wrongdoers and toughen oversight of the accounting industry after scandals involving companies such as Enron and WorldCom. The law creates an oversight board to monitor the accounting industry, toughens penalties against executives who commit corporate fraud, and increases the Securities and Exchange Commission budget for auditors and investigators.

Under the act, a chief executive officer or chief financial officer who certifies false financial reports could get 20 years in prison and be fined $5 million. Shredding of documents could result in a 20-year sentence.