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Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., said today that the Securities and Exchange Commission may have finished nearly all of its regulatory tasks regarding the Sarbanes-Oxley Act, but the true work and effects of the law are just being realized.

Enzi submitted a written statement for a Senate Banking Committee hearing on "The Implementation of the Sarbanes-Oxley Act and Restoring Investor Confidence."

Congress passed the Sarbanes-Oxley Act in 2002 to provide more corporate accountability and to restore investor confidence in the securities markets.

The text of Enzi's statement follows.

Statement by Senator Michael B. Enzi
The Implementation of the Sarbanes-Oxley Act
and Restoring Investor Confidence"
Committee on Banking, Housing, and Urban Affairs
September 8, 2003

It does not seem so long ago that we would find ourselves back in the days of a seemingly endless list of corporate scandals. Almost every day we heard story after story of big corporations that had serious and severe financial problems and accounting staffs that had failed to live up to their responsibilities.

As the only accountant serving in the Senate, I was very concerned about my profession and the very large black eye it received – and justifiably so – from the activities it had pursued over the years. I believe that we took the right step in passing the Sarbanes-Oxley Act to put the corporate governance system on the right track.

At the events marking the first anniversary of the law, Chairman Donaldson, you remarked that, "There's much, much work still to be done – many miles to travel." I fully agree with you. While the SEC has finished nearly all of its regulatory tasks the true work and effects of the law are just being realized.

Now that we have passed the first anniversary of President Bush's signing of the Sarbanes-Oxley Act into law, we have witnessed broad changes in the marketplace and in overall corporate governance. We also have witnessed the placement of independent directors and effective auditors who are now an integral component of corporate oversight.

As we now move into the next phase of the Sarbanes-Oxley Act, I urge the SEC to be vigilant in ensuring that small auditors and small publicly traded companies do not incur a disproportionate regulatory effect of the law. The growth of our small business community is vital to the health of our capital markets, and therefore, vital to our economic growth.

The passage of the Sarbanes-Oxley Act was but the starting point of returning regulatory control back to the Securities and Exchange Commission. Another important step came with the enactment of the Accountant, Compliance, and Enforcing Staffing Act of 2003 that the President signed into law on July 3. This law provided the Securities and Exchange Commission with the much needed authority to hire accountants just as the agency could then hire attorneys. This demonstrates the importance of accountants as an integral part of a strong regulatory system.

In addition, the establishment of the Public Company Oversight Accounting Board has begun to make a difference in the auditing world. As Chairman McDonough continues to bring the Board up to speed, we will see the public company auditors providing financial accounting oversight on a much higher level.

Just as important as it was to improve the corporate governance structure in the public markets, it now appears that we need to improve the corporate governance structure of the regulators of our securities markets. Recently, you sent a letter to the New York Stock Exchange on its corporate governance practices. I am very interested in the Exchange's response and would greatly appreciate if you would share it with me. I strongly believe that the regulators of our securities markets should not permit themselves to be held at a much different standard than we require of the companies that they regulate.

Finally, I would like to thank Chairman Donaldson for taking such quick and firm control of the reins as Chairman of the Securities and Exchange Commission and for working with the Congress to ensure the implementation of the provisions of the Sarbanes-Oxley Act is done with investor respect and confidence in mind. I also would like to recognize all of the hard work of the SEC Commissioners and staff who have made the implementation of the law possible.

Chairman Donaldson, I look forward to your testimony today.

Thank you, Chairman Shelby.