On April 24, 2002, after several hours of lively debate, the House of Representatives passed H.R. 3763, the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 (CARTA). The bill, which was sponsored by Rep. Michael G. Oxley and passed by a vote of 334 to 90, is the one most supported by the accounting profession. But many lawmakers feel more stringent measures are needed.
During the debate over CARTA, House Democrats blasted the bill as a GOP attempt to paper over corporate scandal. They proposed several amendments that were voted down by the Republican-controlled House. The most contentious issues involved leaving the details of the auditors' oversight board to the SEC and stopping short of banning auditors from doing consulting work for audit clients.
An amendment proposed by Rep. John LaFalce to bar more consulting services was voted down by a slim margin of 219 to 202. The Democrats are hoping for more backing from the Senate, where Senators Chris Dodd and Jon Corzine are proposing tougher legislation. "We are missing a golden opportunity," said Rep. La Falce. "We haven't even scratched the surface" of changes needed in the accounting industry.
The AICPA issued a statement saying, "The bill passed by the U.S. House today includes unprecedented and rigorous reforms in the discipline and oversight of the accounting profession. Self-regulation has been part of our profession for nearly 110 years, but we appreciate that the times call for special measures to restore investor confidence. We have heard the bipartisan will of the Congress and are prepared to work cooperatively in moving to the new independent regulatory body mandated by the bill."
View the most current status of CARTA available on the Web.