the energy conglomerate enron was the seventh largest company in the united states and then poof it collapsed [Music] finance ultimately is about trust enron's management had frankly cooked the books concealed problems in the business defrauded investors and more its failure wiped out more than two billion dollars in retirement savings tens of thousands of jobs this scandal was followed by yet other multi-billion dollar accounting frauds at worldcom and elsewhere and so in response to this crisis 20 years ago this july congress enacted the sarbanes-oxley act i was honored to have a front-row seat working with my hometown senator paul sarbanes on this bill an essential goal of sarbanes-oxley was again to restore that trust in our financial system so first it enhanced the quality of auditing standards inspections and enforcement auditing standards for instance were set by a professional association and the profession was writing its own roles that's an inherent conflict thus sarbanes-oxley established an independently funded auditing standard center the public company accounting oversight board under the regulatory oversight of the securities and exchange commission it also ensured that the accounting standards themselves the setter the financial accounting standards board had secure independent funding you see it matters who audits the auditors second at enron their auditing firm had lucrative consulting engagements with the energy company so that's an inherent conflict as well thus senator sarbanes working with congressman mike oxley on the other side worked to create a stronger barrier between auditors and other parts of the auditing firm's businesses and then lastly the enron crisis revealed problems with how companies are governed so sarbanes-oxley established requirements to help ensure that the incentives of executives their boards their auditors their accountants their audit committees are better aligned with their investors for the protection of you so happy birthday sarbanes-oxley in the last 20 years we've learned a lot the quality of public company audits has improved let's not forget our core lessons though it's important to have robust independent organizations setting the standards inspecting the firms and forcing against those rules it's important to separate the parts of an auditing firm from its consulting services that may have conflicts with each other and it's important that companies are held accountable for their numbers when trust in our markets grows that benefits investors and issuers alike