PREVENTIVE MEASURES OF CORPORATE ACCOUNTING FRAUDS：（预防措施的企业会计舞弊）.pdfVIP

th Presented at the 17 Annual Convention of the Global Awareness Society International, May 2008, San Francisco, CA, USA PREVENTIVE MEASURES OF CORPORATE ACCOUNTING FRAUDS Ibrahim M. Badawi Department of Accounting Taxation Tobin College of Business St. Johns University Jamaica, N.Y. 11439 USA Email: Badawii@ INTRODUCTION In reaction to the widespread and diverse corporate accounting frauds during the 1980s and 1990s, the U.S. government promulgated and implemented a diversity of corrective actions in order to protect public interest and to restore public and corporate stakeholders’ confidence in corporate financial reporting, as well as the external auditing function and the capital market. In 2002, the U.S. lawmakers, in a compromise by the House and Senate, passed the Sarbanes-Oxley Act 2002 (S-O or the Act), which was signed by President Bush into Public Law 107-204 on July 30, 2002. The S-O Act has greatly impacted the publicly held companies and their external auditors. The Act has (1) imposed strict reforms of corporate governance responsibility and accountability on publicly-held companies; and (2) mandated the Securities and Exchange Commission (SEC), a government regulatory watchdog of corporate financial reporting, to oversight the accounting profession by, for example, imposing tougher regulatory ethical standards and exercising vigorous enforcement. One of the principal outcomes of the S-O Act has also been the creation of the five- member Publicly Company Accounting Oversight Board (PCAOB), which is established to oversight the public accounting profession. Notably, the Act is applicable not only to U.S. publicly traded companies, but is also applicable to any non-U.S. company registered on U.S. exchanges, regardless of country of