Since the Public Company Accounting Oversight Board was created 10 years ago by the Sarbanes-Oxley Act, the U.S. system of auditor oversight has been fundamentally reformed to better protect investors. The model has spread around the world.
The United States has the most robust, liquid capital markets in the world, and they have propelled our nation to a level of economic development and stature unequalled in human history. These markets work because investors have trust in the financial system and the information it delivers to them.
In 2002, that trust was crumbling due to high-profile corporate scandal and fraudulent financial reporting. Billions in earnings and assets were restated due to intentional accounting errors and manipulation by company management. These failures led to a staggering loss of savings for investors and lost pensions and jobs for many American families. It was time to renew our commitment to integrity in financial reporting and refine the regulatory tools to further the public interest.
In response, Congress passed the Sarbanes-Oxley Act 10 years ago today. Title 1 of that Act created the PCAOB, ending more than 100 years of auditor self-regulation. The Act, and the PCAOB, remind auditors that their duty under the law is to serve, first and foremost, the interests of investors.
The achievement of the goals of the Act are essential to the health of the financial system. The PCAOB will continue to serve these objectives by protecting the interests of investors and furthering the public interest in the preparation of informative, accurate, and independent audit reports.