What 2002 US federal law established the Public Company Accounting Oversight Board?

The 2002 US federal law that established the Public Company Accounting Oversight Board was the Sarbanes-Oxley Act of 2002.

Congress passed the law after major corporate and accounting scandals, including Enron and WorldCom, damaged public confidence in financial reporting. President George W. Bush signed it on July 30, 2002. Its central aim was to strengthen corporate accountability, auditor independence, and the reliability of public-company disclosures.

Title I created the PCAOB, a nonprofit organization overseen by the Securities and Exchange Commission. The board registers public accounting firms, sets auditing and related professional standards, inspects registered firms, and can discipline them. It replaced the profession’s former system of largely self-regulation for public-company audits.

A common mix-up is confusing Sarbanes-Oxley with the Securities Exchange Act of 1934. The 1934 Act created the SEC’s foundational federal securities-market framework, while Sarbanes-Oxley responded to early-2000s accounting scandals and created the PCAOB. The law also introduced executive certification requirements and strengthened audit-committee responsibilities.