Abstract
At the end of the year 2001, and during the year 2002, many financial scandals broke out and shook the confidence that had been placed in our global economy and the reliability of companies listed on the Stock Exchange such as Enron, WorldCom, Tyco, Qwest, and Xerox. These scandals are not just the results of suspicious dealings of only a handful of people. They also disrupted the working of the whole system of listed companies, in a very liberal environment. Various malpractices were uncovered like the interference between audit and consultant companies, and the use of the technique of external growth to hide huge deficits. Such practices gave rise to abuse, especially from top managers and executives; this is why we can see now a reappraisal of self-regulation by companies and corporate governance. After such scandals, the US government decided to intervene. Confidence is a vital element in a market economy and this was put at risk. M. Oxley, a Democrat congressman, and P. Sarbanes, a Republican congressman wrote a law in order to modify deeply, the rules of US corporate governance. The Sarbanes Oxley Act (SOX) was voted unanimously and promulgated on 30th July 2002. Through this law, the US government established tougher controls and regulations for listed companies.
