Corporate Governance: Why Independent Audit Committees Matter

May 15, 2018

By Dr. Cédric Poretti Corporate governance has been a hot topic for many years in the US and Europe as corporations, whether in finance or the hospitality industry, grapple with their supervisory structures. Since 2000, the audit committee has been put forward as an effective mechanism to limit fraudulent financial reporting. Following financial scandals such as Enron and WorldCom, the US Congress issued the Sarbanes-Oxley Act (SOX) in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures. Sarbanes-Oxley requires publicly traded companies to have: the CEO and CFO certifying the financial s...