Insurers hoping for a reprieve from complying with the requirements of the Sarbanes-Oxley Act of 2002, had their hopes dashed as the U.S. Supreme Court unanimously rejected a challenge to the law’s constitutionality.
Passed in the wake of the Enron and WorldCom accounting scandals, SOX established the Public Company Accounting Oversight Board (PCAOB) to oversee the auditors of publicly traded firms. The plaintiffs in the case, the Free Enterprise Fund and accounting firm Beckstead and Watts, had challenged the legality of the PCAOB because its members were appointed by the Securities and Exchange Commission, rather than by the president.
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