Legal enforcement of ethical behaviour and veracious financial reporting: the Sarbanes-Oxley Act
With the increase of value of the stock exchange and internationalization of markets, profits have increased, and with them incentives for fraud. Gordon Gekko's1 motto "greed is good" seems to have been adopted by the large corporations. However, whereas Gekko predicted that greed would save the U.S.A., it has turned out that the fraud resulting from greed can bring great damage to companies and even go so far as to destroying them. One of the five biggest accounting offices in the world, Arthur Andersen, went bankrupt as a result of the fraud at Enron becoming publicly known, and with this the lack of action from Arthur Andersen to prevent or 'fix' that fraud. A current problem in the accountancy world is on the one hand a lack of trust from the general public in the Certified Public Accountant (hereafter CPA), and on the other hand lack of ethical behaviour from the CPA when confronted with error of fraud in a company's financial statements. As Chaney and Philipich (2002) have discussed, after the failure of Arthur Andersen regarding the Enron scandal was discovered, the reputation of Arthur Andersen declined, resulting in difficulties attracting new clients. This can indicate that failure can indeed do great damage. 
In order to motivate CPA's to behave ethical and according to the law, the U.S.A. have enforced the Sarbanes-Oxley Act. The object of this Act is to "fix auditing of U.S. companies"(Coates IV, 2007, p. 91), that is, to enforce ethical behaviour by incorporating what first were a set of unwritten rules into a law. Moreover, an object of the Sarbanes-Oxley Act was to provide a law to make it easier to convict perpetrators of fraud. The description in the Act itself is this: "To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes." (Sarbanes Oxley, 2002, in Streng, 2011, p. 32).
Now, ten years after the acceptance of the Act, the effect can be observed. A point of critique has been that the Act is a "costly regulatory overreaction" (Coates IV, 2007, p. 91). Another criticism mentioned by Coates IV (2007) is that the legal enforcement for which the Act was formed, already existed in other laws. However, in the authors opinion, the true value of the Act cannot be truly observed when looking at costs or other existing laws. What is the true value of the Act, is only observed when looking at accounting scandals which have been prevented by the Act. 

Chaney, Philipich (2002) Shredded Reputation: The Cost of Audit Failure, Journal of Accounting Research, Vol. 40, No. 4, p. 1221-1245

Coates IV (2007) The Goals and Promise of the Sarbanes-Oxley Act, The Journal of Economic Perspectives, Vol. 21, No. 1, p. 91-116

Robert-Jan Streng (2011) Corporate Governance, Internal Control and Risk Management, 2nd edition, Bertius Publishers, Veenendaal

1 Gordon Gekko is a fictional character from the movie "Wall Street".