The bill which was passed unanimously in the Senate was also passed by the house with a vote of 423-3. It was presented by Representative Paul Sarbanes whom wanted to see tougher accounting rules in affect. With the act being in effect there is now a five-member accounting oversight body to investigate and punish accounting firms, of publicly held companies. It also got rid of the peer review process and replace them with federal accounting. If a CEO or CFO is caught lying on their financial reports they can be sentenced with a maximum twenty year jail term or a five million dollar five. It also prevents a

In the Rite Aid Corporation scandals, the Executive Philip D. Markovitz “pleaded guilty to obstruct justice in the federal government’s investigations of the drugstore chain” (Jackson 52). He is facing five years in prison and a possible two hundred fifty thousand dollar fine. Markovitz’s former boss, Timothy J. Noonan whom was the firm’s CEO is ‘expected to receive a probationary sentence because he began cooperating with prosecutors in 2001” (Jackson 52). There are more people whom are involved with this scandal they are also facing up to five years and prison and also a fine of two hundred fifty thousand dollars.

The PCAOB have given the SEC some power to set auditing standards. The SEC has been trying to get auditing powers since 1934 when it was created. In the 1920’s there were accounting scandals involved with audits firms and the New York Stock Exchange whom were having idependent accountants auditing more than 70% of public companies. So in 1934 when the SEC was formed it was the first threat to the auditors’ self-regulation. The committee argued for a number of years trying to get a final result in whom should control the audit standards. It was not until 1939 when they finally came to a vote of 3-2 to “abandon the government’s five-year effort to set auditing standards and to allow the auditors to control the function” (filmcruminqury.com). With the help of the PCAOB board, seventy years later SEC will finally be able to set the power of the auditing standards.

Richard Scrushy is the first senior-level executive to be indicted on charges of accounting fraud since the Sarbanes-Oaxley Act of 2002 has been in place. He was the head chief executive of Health South Corporation. Scrushy was indicted “on 85 criminal counts ‘stemming from a wide-ranging scheme to defraud investors, the public and the U.S. governme

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