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Sarbanes-Oxley: The Unsung Benefits
In an op-ed piece in the Wall Street Journal, Thomas Healey, senior fellow at Harvard University’s Kennedy School of Government, outlines benefits and positive results coming from Sarbanes-Oxley legislation that he thinks many are over-looking:
- The US economy, rather than being stunted by over-regulation, has increased 67% or $4.2 trillion in market value between June 2002 and June 2007.
- AMR Research found that companies have had to pony up $6 billion in 2006 to comply with Sarbanes-Oxley. But Healey points out that in the Enron case alone that shareholders lost $60 billion. It’s a form of insurance and a best practice.
- A report from Moody’s shows that company’s internals controls and procedures have dramatically improved over the last five years.
- Audit fees, while initially high after implementing Sarbanes-Oxley, decrease with each year after implementation.
- There is an implicit agreement by many that Sarbanes-Oxley is the right thing to do. Japan, France, Canada and China are copying the legislation.
