The most popular and comprehensive Open Source ECM platform
Let us know more
Compliance: Oxley Firmly Stands Behind SOX on Five Year Anniversary
July 30th will be the five year anniversary of the Sarbanes-Oxley Act of 2002. The bill was named after its two sponsors, Senator Paul Sarbanes and Representative
Michael G. Oxley. The act contains 11 titles and empowers the Security and Exchange Commission (SEC) with implementing the law’s requirements.
In an interview that Oxley gave recently in Houston, he reflected on the last five years under SOX regulations.
SOX is working. Oxley feels that the recent options backdating scandal is a good example for why SOX is relevant. Most of the cases involved backdating that occurred prior to the enactment of SOX in 2002.
SOX Changes are Welcome. Oxley says that he fully supports the recently revised version of SOX carried out by SEC chairman Christopher Cox. Most important among those changes are the ability of company managers to be able to prioritize high-risk threats, Oxley thinks the focus on high-priority items will result in a change in emphasis on the internal audit and external auditing should become less intrusive and less expensive
PCAOB is not in full gear. The Public Company Accounting Oversight Board created by SOX replaces self-regulation in the accounting industry, but it is still coming up to speed. Oxley says the fall of Arthur Anderson was a huge mistake. “The penalty didn’t fit the crime.” The result was reduced competition, the creation of an oligopy of accounting firms, and higher accounting costs.
Wall Street’s Woes don’t Stem from SOX. The flow of IPOs to capital markets outside the US is happening as more a result of globalization than from compliance with regulations like SOX. The cost of doing an IPO in the US is also significantly higher than abroad — the US investment banks typically charge seven percent while in Europe the costs are closer to two percent.
