|
Big Sis, as we like to call The Economist, has a fine editorial this week discoursing on the fifth anniversary of Sarbanes-Oxley's enactment. The point of the piece is simple: now that the worst error of Sarbox—Section 404, the costly and onerous internal controls provision—has been largely corrected, the act's become a whipping boy for problems that really have little to do with it.
To be sure, the magazine is normally no friend to regulators or regulations. But enough is enough. Sarbox, the editors say, has become "a convenient scapegoat for the bosses of public companies, who tend to get more money and less exposure to complaints about fat-cattery when their companies go private."
One by one, the piece picks apart the truisms that suggest the act is the root of all evil when it comes to the U.S. economy. Hasn't Sarbox sapped Corporate America's fighting spirit? Not with the stock market hitting all-time highs. Surely over-regulation has made senior execs more risk averse? Maybe, but only to the bad risks. Haven't companies fled public markets for the arms of private equity? You can't blame the act for what's become a global trend.
Most pertinently, Big Sis points convincingly to what might be a true advantage for CFOs of "Smelly Old SOX": senior corporate executives "are now far more confident about the quality of the numbers they get from their business units."
If Sarbox has really clarified internal reporting, that would put finance chiefs at the helm of a much more transparent organization—thereby cutting their liability on certifications and putting their jobs on a much firmer foundation.
Has the act really had that effect on your operation, Dear Reader? Or has SOX muddied the reports you get from your units? We'd like to know.
|
Video
