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Last updated at: (Beijing Time) Wednesday, July 31, 2002

Bush Signs Corporate Reform Bill

US President George W. Bush signed Tuesday a "far-reaching" corporate reform bill, putting into law stiff penalties for corporate wrongdoing and tightened regulation over the US accounting industry.


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US President George W. Bush signed Tuesday a "far-reaching" corporate reform bill, putting into law stiff penalties for corporate wrongdoing and tightened regulation over the US accounting industry.

The bill will create new criminal penalties and jail terms for company frauds and an independent, private-sector board to overseethe accounting industry. The independent board will, however, be overseen by the Securities and Exchange Commission. Auditors will not be allowed to provide consulting services for the same companies where they are doing the auditing job.

Signing the bill was believed to be an effort for the Bush Administration to restore investors' confidence eroded by corporate frauds and to ensure more support from voters before the upcoming Midterm election.

The bill, called the "Sarbanes Oxley Act of 2002," came after an compromise of the two chambers of the US congress faced with the critical situation of plummeting stock market, which might have posed potential threats to the economy if it had sustained.

Top members of the Bush Administration, including several cabinet secretaries, the head of the FBI and the chairman of the Securities and Exchange Commission were present at the signing ceremony. Congressional members who had helped forge the compromise and the passage of the bill were also present.


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