Senior Honors Theses

Publication Date

Spring 4-20-2009

School

School of Business

Major

Accounting; Business: Finance

Primary Subject Area

Business Administration, Accounting

Keywords

Sarbanes Oxley Act of 2002, Enron, Effectiveness of SOX

Disciplines

Accounting | Business Law, Public Responsibility, and Ethics

Abstract

The Sarbanes-Oxley Act of 2002 (SOX) was introduced to Congress as a result of the deceit and fraud taking place at Enron in December of 2001. The three factors that led to the scandal were Enron’s weak internal control, misleading off-balance sheet entities, and conflicting interests between Enron’s employees and their chief auditor, Arthur Andersen. The provisions of SOX were established, in part, to strengthen internal control, require proper disclosure for special purpose entities, and eliminate conflicts of interests between a firm and its auditors. The purpose of this paper is to measure the effectiveness of these implementations to prevent fraud from occurring in the future.

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