1. Due in large part to corporate fraud in financial reporting, the government enacted a number of reforms to the accounting profession during early 2000. Congress had strong doubts that the accounting profession had the ability to self regulate itself as it had done in the past. A number of reforms were made to the accounting professions system of self-regulation due in large part to the scandals.

The Sarbanes-Oxley Act of 2002 created the Public Company Accounting Oversight Board.

Explain the major responsibilities of this board.

a. Give an overview of the legislation that altered the self-regulation process for accounting. What are the major responsibilities of this board? Hint: it was 2002!

b. Explain the regulation process (regulatory authority) for accounting firms that audit public companies.

c. Explain the regulation process (regulatory authority) for accounting firms that do not audit public companies.