Back then, the former Securities & Exchange Commission chairman eventually compromised, though not before some of the firms had put in place plans to sell off their lucrative management consultancy arms.
But now Senator Paul Sarbanes has brought forward legislation that could have far-reaching implications for worldwide audits – the proposed new oversight board will have powers to demand audit working papers of non-US accounting firms, stretching across national boundaries in the process.
Understandably, the big firms are not comfortable about the prospect of the Americans being over-powered and over here.
Sitting in the Hart Building, overlooking the Senate, Sarbanes cuts an impressive figure.
His CV tells you he is no slouch when it comes to legal and financial matter.Born in 1933 to Greek immigrant parents, Sarbanes grew up in Salisbury, Maryland.
He studied public and international affairs at Princeton, and then followed the well trodden route of a Rhodes scholar at Balliol College, Oxford. Not content with that, Sarbanes then studied at Harvard before eventually joining the real world back in 1960.
Sarbanes was first elected to the House of representatives in 1970 as a Democrat, where he remained until 1976 when he graduated to the Senate, to serve as the new Democratic representative of Maryland.
His major power base lies in his chairmanship of the Senate committee on banking, housing and urban affairs, though he also serves on the joint congressional economic committee, the powerful Senate foreign relations committee and the Senate committee on the Budget.
His interest in inaccurate accounting and fraud goes wider than his current reform bill. Last year, he co-sponsored a bill aimed at tightening up election campaign financing, in part a response to the presidential election fiasco in Florida.
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