Enron corporation

The bankruptcy and the failure of the Enron Corporation in 2001 shook investors and leads to congressional hearings. Congress reacted to the collapse of Enron, WorldCom, and other companies, when it affirmed the Public Company Accounting Reform and Investor Protection Act of 2002 (known as the Sarbanes-Oxley Act after its congressional sponsors). Both sponsors seek to reinforce the integrity of the federal security disclosure system and to federalize specific aspects of public corporation law. New financial scandals at other companies like WorldCom and MCI proved that Securities Regulations had severe accounting problems in the public traded companies. Lack of audit independences, financial disclosure, and corporate responsibility; conflicts of interest analyst, accountability corporate and criminal fraud; commission resources and authority; public company board accounting oversight; white-collar crime; corporate and accountability fraud–all these elements of misconduct exposed to Congress passed Sarbanes-Oxley as a regulatory response.