As pointed out by Bill Travis (2004),
I'm not going to argue that the concept of improving financial reporting and auditing isn't valuable, because it is. The question, however, is at what point in time do the costs and the hours exceed the value? I think if somebody wants to lie, cheat and steal, they'll just find a different way to do it,"
CEOs and CFOs are very much concerned on the Sarbanes-Oxley law because it presents great impact in their business procedures, not to mention the cost that the requirements of the law demands. One for instance is that, because of the law, business partners and prospective investors would naturally insist on assurances such audited and certified financial statements. Another is that the law affects the benefits and executive compensations. But, these effects are not the only concern of CEOs and CFOs about the Sarbanes-Oxley law, but the question...
Many businessmen find that the Sarbanes-Oxley is not efficient and effective enough to ensure validity and accuracy of financial statements. Instead it just causes them disadvantages because they have to abide by the law. As Alexander Theodorou (2004) reports,
Sarbanes-Oxley] A political game with serious consequences: doubts regarding the effectiveness of the Sarbanes-Oxley Act are growing with many seeing the legislation as ill-conceived, poorly budgeted, and inadequate as a means of safeguarding the U.S. capital markets.
Literature on the Sarbanes-Oxley Act of 2002 The field of specialized literary reviews on the Sarbanes-Oxley Act is a widely spread one presenting numerous issues form various standpoints. Reviewers' opinions vary based on their position towards the bill and their prior professional expertise on white-collar crimes. Among the mostly appreciated and close to reality works are: The Impact of Regulatory Information Disclosure on Information Security Investments, Competition and Social Welfare by
Sarbanes-Oxley Act -- it's a good thing In the wake of the horrible corporate scandals of recent years, including Enron and Arthur Anderson, it became readily apparent that some kind of regulation of ethics must be established. Indeed, any scandal in which large numbers of investors lose billions of dollars due to misconduct, is likely to bring action, and the Sarbanes-Oxley Act of 2002 is just that. However, although much is said
If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important rule that would have had an impact upon Enron is the rotation rule. The lead and concurrent audit partners cannot stay on a particular public company for more than five years, they must continually rotate. Had this rule been in
Sarbanes-Oxley. The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated last year in the Sarbanes-Oxley Investor Protection Act, which establishes new guidelines for the securities industry. Initially a Democratic brainchild, the act became favored by Republicans in the House when it was realized that such adjustments would be of great benefit to
Sarbanes-Oxley Act While most Americans know the names Enron and Worldcom, fewer know the term Sarbanes-Oxley Act; however, despite the alarming impact of the two business disasters, the potential impact of Sarbanes-Oxley stands to exceed the impact of those two bankruptcies many times over. While Enron and Worldcom each held a claim to 'biggest' or 'most' in some aspect of global business and also in various aspects of global business disaster,
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers and staff to meet the contingencies of the proposed systems and controls. The Sarbanes-Oxley section will help the companies on the other hand gain a lot of investment and support from the investors by providing a quality and timely information,