Sarbanes Oxley (which I refer to as the “Accountants’ Job Security Act”) is a law that encumbers many corporations with far too much beaucracy and headache compared to the benefit. Made in response to the corporate scandals a few years back, it was hoped that the law would solve problems of corporate malfeasance. Instead, it’s put an unecessary and counterproductive weight on American industry.
Don’t get me wrong. There were (and still are) real problems with corporate accounting. In particularly, there are some intricacies in GAAP accounting that, I believe, work against the purposes of good financial practices. And if you need to be an accountant just to understand a company’s financials, something is wrong.
And, SOX did actually mandate some pretty good things. Many of the problems in SOX are in the internal controls required (the “SOX 404”).
Solving the problem of bad corporate accounting and practices is something easily doable. But it doesn’t require the 800 lb sledgehammer of Sarbanes Oxley.
Network World article on the situation here.
Alex Eckelberry