A statute enacted on July 30, 2002 in response to a number of major corporate and accounting scandals, including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom, which cost investors billions of dollars when the share prices of the affected companies collapsed and shook public confidence in the nation's securities markets.

Sarbanes-Oxley made a number of significant changes to improve corporate governance and financial reporting obligations and combat corporate and accounting fraud, and created the Public Company Accounting Oversight Board (PCAOB), to oversee the activities of the auditing profession. Sarbanes-Oxley established new or enhanced standards for reporting company directors and executive officers and for public accounting firms.