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US: US accountants charged in probe

BBC News Online
September 14th, 2007

US financial regulators have charged 69 firms for breaking new corporate laws brought in after a wave of scandals.

The companies were charged with failing to register with the Public Company Accounting Board (PCAB) as required under the 2002 Sarbanes-Oxley law.

The Securities and Exchange Commission (SEC) added that 50 of the companies had already settled their cases.

Sarbanes-Oxley was passed after the financial scandal that brought about the collapse of energy giant Enron.

In total, 37 accounting firms and 32 partner groups were brought to book by the SEC.

The watchdog added that the companies issued a total of 60 audits for 53 companies between November 2003 and October 2005.

Action

The 50 firms and partners that settled their cases were censured by the SEC but not fined.

Following the news, SEC Enforcement Director Linda Thomsen said the watchdog was "committed to ensuring compliance with the regulatory framework Congress established for auditors of public companies".

"The actions we take today protect investors and will deter future violations of Sarbanes-Oxley's registration provision."

Sarbanes-Oxley replaced self-regulation in the accounting industry. Now firms are required to register with the accounting oversight board.

The move came after lawmakers said the previous system was insufficient to police and punish fraud.




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