Dodd - Frank Act Essay

In July 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into legislation as a result of our society experiencing the worst financial crisis since the Great Depression starting in 2007. With failing businesses, loss of personal savings, the housing market crash, millions of lost jobs, and tremendous fraudulent acts from once trusted companies, there was an undeniable need to restore accountability and responsibility in our financial system to make Americans feel confident in the economy again. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was implemented to address and prevent the financial crisis from recurring again by instituting tighter controls and standards for financial markets. The stated aim of the legislation is, “To promote the financial stability of the United States by improving accountability in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect the consumers from abusive financial services, practices, and for other purposes,” (Dodd 2010, pg 2). The legislation contains requirements that deal with numerous aspects of corporate governance, financial transactions, executive compensation, public company disclosures, whistleblower procedures and protections, mining and use of certain materials and much more (Dodd 2010). This legislation impacts a number of financial institutions in the United States. While the intended purpose of Dodd-Frank act is to increase government oversight of the financial markets and to increase consumer protection, certain provisions of the act have great impacts on the accounting profession and accounting reporting implications.

First, Some Dodd-Frank provisions empower agencies to make new rules (Bordonaro 2012). Dodd-Frank includes provisions to enhance the powers of the Public Company Accounting Oversight Board (PCAOB). The act allows the PCAOB, along with the Securities and Exchange...