As critical information became available, the market reflected its concerns about underlying business practices and accounting through the declining values of equity and debt. The Sarbanes-Oxley Act, which became law in July of last year, contains a number of provisions to improve accounting and disclosure.
Chief executive and financial officers are now required to certify that their financial reports fairly represent the financial condition of the company, not just that the reports comply with generally accepted accounting principles. Sarbanes-Oxley directed the Securities and Exchange Commission (SEC) to issue new rules on the disclosure of off-balance-sheet transactions.