Sarbanes-Oxley Costs Exceed Benefits

coondoggie writes "Two years of compliance with the Sarbanes-Oxley Act (SOX) have shored up corporate accounting practices - but with lopsided costs compared to benefits gained. Bill Gradison, acting chairman of the Public Company Accounting Oversight Board (PCAOB), said that guidance the SEC issued last year and PCAOB's latest auditing standard may not be enough to clarify the rules that govern the reporting and auditing of internal controls. 'Based on the information we already have, it would seem that some further changes may be in order,' Gradison said."

Comments

Costs to who?

[plopez]

Sooo... tally up the cost of the Enron scandel:
1) The company went under, costing investors billions.
2) Some of the investors were people working for retirement, count up the cost of medicare and other public support they will need.
3) The manipulation of the elect. market caused a number of bad side effects including lower competitiveness of businesses in the affected areas (e.g. California).
4) Some business, I have no doubt, went out of business due to increased costs. Good ideas may have been lost, peoples lives and dreams shattered.
5) Senior who had to decide between drugs and utilites, some decided on utilities perhaps causing premature death.
6) Davis was unjustly (ok, he wasn't perfect but who is?) run out of office and instead you have a 'wanna be' called 'Ahnold'. They manipulated the politcal process.

SOX should be a reminder that large corps. can have huge impacts. And so the execs should be aware and bound to use their power in a moral and ethical manner. And since they cannot police themselves, external controls are needed. SOX isn't perfect, but we need to understand that we need to protect our people and economy.

If I had my way Lay et. al. would be on trial for terrorism and manslaughter for the people who died and the damage to the US economy.

(I will now step down off of my soap box...)