Due diligence in a new era of accountability

Following the scandalous collapse of Enron, WorldCom, and other firms, we entered a new era of accountability—which brought us the Sarbanes‐Oxley Act (SOX) in 2002. It ushered in stricter standards for corporate conduct and governance. But now we're experiencing a second wave of accountability...

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Bibliographic Details
Published in:The Journal of Corporate Accounting & Finance 2009-09, Vol.20 (6), p.65-70
Main Authors: Sherman, Andrew J., Welch, John E.
Format: Article
Language:English
Subjects:
Accountability
Acquisitions & mergers
Due diligence
Online Access:Get full text
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Summary:Following the scandalous collapse of Enron, WorldCom, and other firms, we entered a new era of accountability—which brought us the Sarbanes‐Oxley Act (SOX) in 2002. It ushered in stricter standards for corporate conduct and governance. But now we're experiencing a second wave of accountability and reforms. Its highlights include the election of President Obama and his commitment to transparency; the failure of banks and automobile companies; the Madoff scandal; the severe global recession; and mistrust of Wall Street. All this has triggered an increase in staffing at the Securities and Exchange Commission. Many see vigorous enforcement actions and new GAAP standards ahead. But how does this second new wave of accountability affect merger‐and‐acquisition (M&A) due diligence? And how can your firm avoid its dangers? The authors take a close look at how to operate in this new environment. © 2009 Wiley Periodicals, Inc.
ISSN:1044-8136
1097-0053
DOI:10.1002/jcaf.20531