Risk & Compliance

PCAOB’s Niemeier: No Sarbox Rollback

''If we start tweaking,'' he says, ''are we putting at risk the one thing that gives us a true competitive advantage in the world?''
Stephen Taub and Dave CookFebruary 16, 2007

Charles Niemeier, a member of the Public Company Accounting Oversight Board, warned policy makers and other critics that they may damage the reputation and competitiveness of U.S. markets if they roll back the Sarbanes-Oxley Act and other securities laws, reported Reuters.

Niemeier made his remarks on Thursday, according to the wire service, during a panel discussion titled “The Burdens of Regulation: Are the U.S. Capital Markets Less Competitive?” sponsored by the New York Society of Security Analysts. He reportedly asserted: “I don’t believe that ‘regulation light’ is an answer. We’re looking at an interesting time in where these markets are developing in other countries. It would put us in an extremely dangerous position to have lowered our standards in the United States.”

Critics of Sarbox have asserted that the landmark law makes it more difficult for foreign public issuers to be listed on U.S. exchanges and has driven away some companies that were listed in the United States before the law was enacted.

For that matter, Niemeier’s own outfit is also under fire — from the Securities and Exchange Commission, no less — for burdening Corporate America with excessive internal-controls rulemaking. In a counter-revolution to post-Enron reforms, the PCAOB has become a poster child for overregulation.

On Thursday, however, Niemeier reportedly stressed the importance of investor protections that maintain the strength of U.S. markets. “If we start tweaking, are we putting at risk the one thing that gives us a true competitive advantage in the world?” he asked, according to Reuters.

Merritt Fox, a professor at Columbia Law School who joined Niemeier on the panel, also stands by Sarbox. Fox reportedly told the audience: “In our reaction to increased foreign competition, we shouldn’t throw the baby out with the bathwater. Our regulatory system as it applies to U.S. firms is not perfect, but proposals for change should be justified on their own grounds, not simply that it scares foreign firms away.”

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