What has been done to strengthen the audit function since the cases occurred?
Following high-profile public fraud cases like Enron and Worldcom during the years 2000-2002, Congress passed an act called SOX intending to improve investor’s confidence and prevent public companies from continuing to commit fraud. This act implemented rules intending to reduce conflicts of interest, avoid and detect fraud, and increase transparency in the financial statements. As a result of SOX, the PCAOB was created to oversee the accounting profession. The primary responsibilities of the PCAOB are to establish auditing standards, conduct inspections, and enforce disciplinary penalties.