Financial Disclosure

• Prior to Sarbanes-Oxley, several large corporations came under intense scrutiny due to charges that their financial disclosures were misleading, and did not reflect the true state of the company's finances. These misleading disclosures had injured investors' confidence in the financial markets.
  
  

Accounting Problems

• Investors charged that accounting firms' interests were too closely aligned with those of their clients, giving the accountants a reason to help obfuscate financial problems.
  
  

Management

• After the financial meltdown of several high-profile public companies, both investors and the public charged that management had been negligent in supervising the companies' accounting procedures and final financial disclosures to the public.
  
  

Inside the Company

• Sarbanes-Oxley mandates numerous changes to corporate practice, including requirements that top management "sign off" on public corporations' financials before their release, and that attorneys report wrongdoing to management or the board.
  
  

Accounting Firms

• Sarbanes-Oxley created an independent entity, the Public Company Accounting Oversight Board, which reports directly to the SEC. This board supervises and enforces rules for auditors of public companies, with the broad goal of ensuring that audit results are clear and true.