Sarbanes-Oxley survives US Supreme Court hearing

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Data-management act given the 'OK'.

The United States Supreme Court has issued a ruling to re-affirm the 2002 Sarbanes-Oxley financial data compliance act.

In a 5-4 ruling, the court decided to by and large uphold the Public Company Accounting Oversight Board (PCAOB), which manages the act's limits and regulations on corporate accounting practices.

The board had been the subject of a challenge which argued that its members operated with unconstitutional layers of protection and that the president did not have proper ability to remove members.

The court agreed that the limitations on removing board members were unconstitutional and that both the PCAOB governing commission and the president should be given the ability to remove board members at will.

However, the judges also ruled that the removal policies could be severed from the rest of the act, striking down further requests to limit the board's authority and the reach of the act.

"Concluding that the removal restrictions are invalid leaves the board removable by the commission at will, and leaves the president separated from board members by only a single level of good-cause tenure. The commission is then fully responsible for the board's actions, which are no less subject than the commission’s own functions to Presidential oversight," wrote Chief Justice John Roberts in the court decision [PDF].

"The Sarbanes-Oxley Act remains 'fully operative as a law' with these tenure restrictions excised."

The ruling confirms the Sarbanes-Oxley act, which since its 2002 enactment has helped to shape multiple areas of corporate IT such as compliance and auditing.

Copyright ©v3.co.uk


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