Catherwood LibraryILR School

Responding to a rising tide of corporate scandals, the U.S. Senate yesterday passed a landmark management and accounting reform bill by the same 97-0 margin that it passed an amendment adding strict criminal penalties for corporate executives to that bill last Wednesday (see WIT for July 11, 2002). Although the failure of amendments requiring companies to record corporate stock options like any other expense have left loopholes for accounting fraud according to some senators, the Senate bill remains much stricter than a reform bill passed by the House of Representatives in April and supported by the president. As the Republican Speaker of the House has refused to put the Senate bill to a House vote, the legislation will now go to negotiation---where many predict that pressure from the yesterday’s unanimous vote will lead to compromise legislation closely resembling that passed by the Senate.