The Pendulum's Swing

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It's not even five years since President Bush signed the Sarbanes-Oxley Act. But take a look at the changed mood among regulators, politicians, and prosecutors, and you get the feeling that it's much longer than that.

In short, the rulemakers seem now to agree that they've overdone it. Stern attitudes at the Securities and Exchange Commission about the need for companies to check each and every internal control have given way to a fondness for "scalability." The SEC and the Public Company Accounting Oversight Board have embraced "risk-based" approaches instead of bright lines. And prosecutors now appreciate the limits imposed by attorney-client privilege.

An apparent SEC retreat on executive compensation disclosure, a move toward protecting attorney-client privilege, an easing up by regulators on bank's scrutiny of structured finance: The list goes on and on. There can be little doubt that the pendulum has swung away from what senior finance executives have long seen as excessive rulemaking and legislation. Still, the question remains: How much will the current deregulatory mood be translated into action?

Sarbox on Ice?
True or false: The SEC, the PCAOB, and Congress are lightening up on Sarbanes-Oxley and legal liability.
Top Ten Signs the Pendulum Has Swung
With Sarbanes-Oxley under fire, regulators, Congress, and the courts seem primed to ease up on post-scandal reforms.

SEC's Hewitt: Indemnify the Big Four
The SEC's chief accountant calls for auditor protection, and putting the "P" back in GAAP.
SEC Says Materiality Should Drive 404
The SEC proposes guidance to help cure corporate executives of what commissioner Paul Atkins calls an "obsessive-compulsive mentality" in checking for controls lapses.
A Vision Problem at Top Audit Firms
Do the CEOs of the top audit firms really want to use technologies such as XBRL to revolutionize financial reporting, or do they simply want to insulate their firms from liability?
PCAOB Proposes AS2 'Repeal'
The board abandons its current, controversial internal-control standard.
Capital Markets Report Urges 404 Fixes
A panel says changes in the way Sarbanes-Oxley has been applied will improve the competitiveness of the U.S. capital markets.
Sarbox Rollback Report Due November 30
Treasury Secretary Paulson, and Sarbox 404 critics, await the findings of a blue-ribbon panel charged with dissecting the rules.
The SEC Stirs the Pot on Executive Comp
The commission miffed politicians and investor groups by changing the reporting of stock options cost right before Christmas.
Exec Comp: The SEC's Side of the Story
Surprised by reaction to a change in compensation disclosure rules, the SEC contends that it's requiring more disclosure about corporate stock and option outlays, not less.
Bye, Bye Enron, Regulators Say
New guidance on structured finance recalls how long ago and far away the Houston debacle seems.
Specter Re-ups Thompson Memo Battle
The senator reintroduces a bill that would curb how prosecutors can ask for privileged information in corporate criminal cases.
McNulty Revises Thompson Memo
Prosecutors must now obtain the deputy attorney general's signature before asking companies to share attorney-client-privileged information, and only in rare circumstances.
Securities Class-Action Suits Sharply Decline
A Stanford study attributes the decline in shareholder lawsuits to Sarbox and a strong stock market but notes that investors are increasingly questioning companies' accounting methods.

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