Full disclosure reform proved to be an empty promise to many investors after the stock market bubble burst in 2000, but its defenders became even more aggressive in propounding its supposed benefits. Former Securities and Exchange Commission (SEC) chairman Arthur Levitt was the leader of that pack. After he left the agency, he wrote a self-serving book that blamed the collapse of the markets on everything but his own stewardship. Levitt claimed that he had been frustrated by Republicans, plus Democrat Senator Joseph Lieberman, and a group of legislators that Levitt derided as “New Democrats” with “probusiness positions.” Levitt claimed that “powerful special interest groups” on Wall Street were another barrier that kept him from stopping abuses in the market.Those coconspirators included the Business Round Table, the Securities Industry Association, the United States Chamber of Commerce, and the National Federation of Independent Businesses. Democracy was, indeed, a terrible thing for full disclosure. Levitt did not, in any event, explain why the vast powers already given to the SEC were inadequate to stop even the grossest of accounting frauds. Indeed, the number of investigations and enforcement actions actually declined during several of the years that Levitt served as chairman of the SEC (Garner et al, 2008).
Levitt advocated more regulations even though the federal securities laws and SEC regulations already filled volumes. None of the scandals or schemes during the market bubble were particularly novel, but Levitt's posture appeared to be that, if a lot of regulation does not work in assuring full disclosure, add a lot more. Levitt wanted to make the already draconian sanctions in the federal securities laws more punitive and require that anyone even loosely connected with the process become enforcers and informants in the guise of being “gatekeepers”.
Origins of Sarbanes Oxley Act
The Sarbanes-Oxley, or SarOx Also known as SOA (STI acronym in English for Sarbanes Oxley Act), is the law that Regulates the Financial accounting and auditing functions and in a severely penalized, corporate crime and white collar. Because of the multiple fraud, administrative corruption, conflicts of interest, negligence and malpractice of some professionals and executives who know the codes of ethics, succumbed to the lure of easy money and by companies and corporations cheating partners, employees and stakeholders, including customers and suppliers.
The application and interpretation of this law has created many disputes, one of them is the extraterritorial jurisdiction and international, which has created panic in the global financial system, especially with correspondent banks in the U.S. and multinational companies listed on the stock New York Stock Exchange. This is the version of the law in a Spanish translation, which can be reproduced completely, quoting the source: U.S. Congress Sarbanes-Oxley Act of 2002 USInterAmerican Community Affairs reproduces this law as an important document within the framework of our programs prevention and education of the violation of the law (Ali & Gregoriou, 2006).
The conflict in the relationship Between the Audit and Consultancy