The Crisis in Accounting, Auditing and Corporate Governance
The Financial Economist Roundtable met to discuss the crisis in corporate governance, auditing and accounting resulting from the recent revelations in the Enron, Global Crossing, Adelphia, WorldCom and other corporation cases, which has led to heightened uncertainty in US equity markets, ultimately resulting in passage of the Sarbanes-Oxley Act of 2002 (the"Act")*. The Roundtable endorses the on-going efforts to strengthen corporate governance and the accountability of management and external auditors. However, it questions whether some of the legislative proposals, subsequently enacted, are effective, and may even be counter productive. For this reason, among other things, the Roundtable also recommends the establishment of an outside blue-ribbon commission to investigate a series of questions and issues that are either not addressed or not likely to be resolved by the recent law.
