The Sarbanes Oxley Act, A Successful American Energy Company

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On December 2001 Enron, a successful American energy company, was filed for bankruptcy. It was held that what led to the bankruptcy was, among other things, the lack of transparency in the functions of auditing and accounting. This is why, in July 2002 was adopted the Sarbanes-Oxley Act, with the aim to overcome these directorship and accountability weaknesses. Alongside this regulatory response in the United-States, in the United-Kingdom rules of good practice and principles for good corporate governance have emerged in the form of Reports and Codes (even before the Enron crisis occurs). Similarly, the international economic actors also codified rules and principles for a good corporate governance. However, none of these rules prevented the financial crisis of 2008 , and shareholders were singled out as the ones who did not get involved enough in the management of the company, and who did not raise concerns about the company’s financial difficulties . Therefore, the United-Kingdom adopted the Stewardship Code in 2010 as a response to these agency costs. Interestingly, the two examples above reveal that a logical and systematic answer to a collapse is the introduction of a new regulation. But is it an effective one? Firstly because of their voluntary nature; maybe we should opt for a stricter constraining regulation. We will examine this option in the first part of the essay. Nonetheless, it is obvious that regulation cannot be efficient in every matters of corporate

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