Source: Jane Bryant Quinn [Washington Post] ( Free Registration )

Just when you thought that the drive toward better financial accounting couldn’t be stopped, a stick may be shoved into the spokes. A decision expected soon from a federal court might throw the Sarbanes-Oxley Act into limbo. The law, also known as SOX, is essential to the movement for accurate and honest corporate reports. Congress could rescue SOX but perhaps with its beating heart cut out.

A sideways challenge to the law is before the U.S. Court of Appeals for the District of Columbia Circuit. The question: whether the Public Company Accounting Oversight Board, created by Sarbanes-Oxley to clean up the Enron-tainted auditing profession, is constitutional. In a June 5 memo, Linda Lord, head of legislative and regulatory affairs for the banking giant UBS, called it “highly likely” that PCAOB would lose the case. “Not only will it be put out of business,” she wrote, “but SOX in its entirety will fall.”

Read Full Article: Lawsuit threatens Sarbanes-Oxley Act