by Jack Roviere

Created on: June 19, 2008   Last Updated: March 14, 2010

The Sarbanes-Oxley Act has threatened and limited the employment opportunities of corporate and audit professionals substantially since 2002. After all, why shouldn't auditors be allowed to also consult the corporations they audit? Can't an accountant make an honest buck without Uncle Sam reaching in to mess things up?

Obviously, this scenario is precisely just one of the rampant problems of the pre-Sarbanes-Oxley world. The Sarbanes-Oxley Act has been one of the most successful and sweeping reform laws to re-establish equity, professionalism and prestige to the accounting and auditing world. Sarbanes-Oxley, or Sarbox, was passed by overwhelming majorities in both houses to counteract and prevent any future scams like the massive corporate scams perpetuated by Enron, Tyco International, and Worldcom (just to name a few of the most noticeable ones.)

One might think: shouldn't there be a watchdog entity that makes sure companies aren't falsifying financial data or conducting bogus transactions to make itself look healthier to investors? The problem of the pre-Sarbox world was that there were such entities - auditors from companies such as Arthur Andersen - the only problem was that the law at the time didn't regulate well enough the activities that such auditors could or couldn't do.

The way large accounting firms were designed (and still are designed, in a way, today) allowed one firm to do many different financial features: a firm would have departments for auditing financial information to ensure its truthfulness to investors, for consulting corporations to improve any business inefficiencies based on internal or external financial documents, and maybe departments based on lowering the company's tax profile.

Many times, the same auditing firm would be consulting a corporation as would be consulting. It was a conflict of interest that the pre-Sarbox law was blind too - although today, most people can easily see that it's hard to be unbiased to a company whose financial stake could essentially be sustained or hacked away by a good or bad quarterly earnings showing when they are also paying your staff, this obvious sight escaped those at some accounting firms, Enron, and other corporations.

After the crash of several such companies (and the dissolution of one of the "Big 5" accounting firms - the previously mentioned Arthur Andersen - then came the reform, the Sarbanes-Oxley. It took a look at several of the obvious and avoidable wrongdoings of several of the

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