WASHINGTON, D.C. – In a major separation-of-powers ruling, the U.S. Supreme Court yesterday said that members of an accounting oversight board created as part of the Sarbanes-Oxley Act were too insulated from presidential authority to be part of an accountable executive branch.
Under the law, meant to respond to the Enron and WorldCom accounting scandals, the new board was given powers to register, inspect and, if necessary, discipline public accounting firms. Its five members were appointed by the Securities and Exchange Commission (SEC), whose members, in turn, are appointed by the president. But members of both bodies can only be removed for “good cause,” not for policy disagreements.
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