Population Statistic: Read. React. Repeat.
Friday, May 20, 2021

A while back, while making note of the scintillating topic of new European Generally Accepted Accounting Principles, I mentioned how the Sarbanes-Oxley Act had become a universal scapegoat for the business world:

While there’s no denying it’s an added burden, what I’ve experienced is more of a use of Sarbanes-Oxley as a catch-all for anything a company doesn’t feel like disclosing. I’ve had CFOs tell me they can’t give out detailed info because it would violate their compliance — a neat trick, since the point of that legislation is to make companies more transparent, not less.

I’m not the only one to notice this: The Washington Post’s Marc Fisher shows how the magic words “Sarbanes-Oxley” are used to justify everything from an added level of computer passwords to ethics violations.

All this is befuddling to Maryland Senator Paul Sarbanes, who helped craft the law:

“You have some way-out requirements, and the company says that’s what Sarbanes-Oxley says we have to do, but these changes are neither in the act nor in the regulations implementing the act,” Sarbanes tells me. “I don’t know where some of these things came from.”…

Sarbanes sighs at how his name is being taken in vain as a nation of office workers grouses about new incursions on their time and sanity. “Some people in the business world think it’s unnecessary regulation,” he says, “but look at the price we paid with Enron and those scandals in losses of jobs and confidence in our capital markets. We didn’t set out to create onerous requirements. We were confronted with these gross abuses, and we set out to protect the American investor.”

I find it amusing to hear all the grousing over a law that requires nothing more than simple accountability. That the extra work drives CFOs to distraction (and in the case of Outback Steakhouse’s Bob Merritt, resignation from his job) elicits no sympathy from me at all. These companies are more than happy to reap the rewards of being a public company — huge cash reserves, leveraged borrowing, etc. — but ask them to pay for those advantages by lifting the veil from their financial books, and they have a fit.

I’m sure all this bitching will have the desired effect: After a few more years, a movement will form to repeal Sarbanes-Oxley, citing the “hardship” it imposes upon companies.

by Costa Tsiokos, Fri 05/20/2005 07:15:48 PM
Category: Business | Permalink |

Trackback this entry: Right-click and copy link
4 Feedbacks
  1. The wonderful world of financial minutiae
    Requirements of the Sarbanes-Oxley Act are viewed as onerous by some corporate officers, and, says CT, that’s just too bad: I find it amusing to hear all the grousing over…

    Trackback by dustbury.com — 05/21/2005 @ 12:20:49 PM

  2. And when that day comes for S-OX to be repealed via some PR/Lobbying Movement, it would behoove the blogosphere and the press to locate companies who make, say, at least 35% of their revenue from S-OX enforcement and say to Wall Street:

    “Do you want to force these folks out of a job? All because you hate to have to follow the law?”

    Comment by Brad S — 05/21/2005 @ 12:56:43 PM

  3. SARB-OX SCREWS BALLMER OUT OF AN XBOX

    Don’t you feel all kinds of sorry for Microsoft CEO Steve Ballmer, who didn’t score one of his company’s hot-hot-hot Xbox 360 consoles as an executive perk?
    “The Ballmer children do not have their Xbox 360 yet. I’m in th…

    Trackback by Population Statistic — 12/08/2021 @ 09:18:28 PM

  4. TWILIGHT OF THE CFO…

    How has Sarbanes-Oxley changed corporate America? From recent indications, it’s changed the nature of the chief financial officer position:
    SarbOx has forced CFOs to spend nearly a third of their time on IT systems, paperwork, and tedious board…

    Trackback by Population Statistic — 01/22/2007 @ 11:46:58 PM

RSS feed for feedback on this post.

Leave a comment

Comment form closed to reduce comment-spam opportunities. Sorry about the inconvenience. Please feel free to respond to this post via Trackback and/or Pingback!