Posted on 05/27/2006 10:54:24 PM PDT by RWR8189
Three US congressmen are pushing for an amendment to the Sarbanes-Oxley Act (SOX), the law designed to make executives more accountable, in a bid to water down the regulations for medium-sized companies.
Gregory Meeks, a Democrat, has joined Republicans Tom Feeney and Pete Sessions to introduce an amendment to the Act that would exempt companies with a market value of less than $700m (£377m) or annual revenue of less than $125m and fewer than 1,500 shareholders from having to comply with the regulations.
The unusual cross-party move comes just days after Kenneth Lay and Jeffrey Skilling, the two top executives of Enron, were convicted of plundering the company. SOX was introduced in an attempt to prevent another Enron fraud. It was welcomed in 2002 for establishing a standard of good practice for the governance of a public company, the provision of adequate accounting oversight, the independence of auditors and the need for extensive financial dis-closure.
However, it soon became clear that the law loaded small com-panies with unreasonable red tape and expenses. Paul Williams, the president of Toussaint Capital Partners, estimates that the law costs each business $3m to $4m to meet the reporting requirements of the Act and $1m to $2m in additional costs. "It's literally driving companies overseas," Williams said.
Feeney told Congress: "Companies are spending a significant portion of their bottom line complying with regulations instead of offering more employee benefits and dividends."
The damaging effects of the Act are most noticeable in the raising of capital for new companies. "The high burden of regulation and compliance is potentially outsourcing America's lead in the world's capital markets. More companies are increasingly turning to London or Luxembourg instead of New York," he said.
for small-cap companies, this has been a killer. I have seen numerous profitable co's trying to go private/delist themselves to get out of the expenses this law carries for them.
Sarbanes-Oxley is a dog that needs to be brought to heel.
In 2002 I was hired to handle world-wide pricing issues for my company. These days I spend 40+ hours per week dealing with SOX 404... it is a xxxxxxx joke with the auditors running, smiling all the way to the bank with their billable hours.
The "statesmen" known as senators Sarbanes and Oxley should be made to sit in a room and deal with this beast they've created until the end of times.
I attended a small alumni job fair hosted by my alum's business school right before SOX became law. A SOX compliance auditing firm offered every accounting major a job on the spot pretty much if the person was even minimumly qualified. 100+ positions to fill as fast a possible.
I knew then this law was going to get out of hand.
SOX compliance has become one of the few job creation engines for well paying jobs in the finance field in NJ in the last 3 years. The SOX laws just suck companies dry do to compliance costs, and provide no added value to the companies. Complete nonsense.
The company I work for was delisted recently for it's inability to comply with this law. Life may be better on the pink sheets and of course all that money spent on accountants can now go to the bottom line. This law has been a nightmare for corporate America.
I just finished a contract where part of the work was for SOX compliance. When I read the law it seemed created to be impossible to fully comply with - where the law could be understood at all!
red tape = SOX
FORM 15
CERTIFICATION AND NOTICE OF TERMINATION OF REGISTRATION UNDER SECTION 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934 OR SUSPENSION OF DUTY TO FILE REPORTS UNDER
SECTIONS 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
Wanna get rid of SOX? Make it apply to Congress.
Please, please, please, please, please get rid of it! I'm sick of doing SOX audit stuff at work. I have better things to do with my time. Unfortunately, I work for a larger company so this is unlikely to help. :-(
The good news is that SOX, as constituted now, will eventually apply to EVERY organization that transacts business, including state and local governments (yes, I know they're not subject to it, but they will eventually have to do it anyway - a lot ofthem have told me they're anticipating it). At the point it starts causing them pain and wasting money they don't have (on something OTHER than social programs), you'll see it change dramatically.
>>When I read the law it seemed created to be impossible to fully comply with - where the law could be understood at all!
See the first quote on my FR profile page.
Perfect.
Sarbanes-Oxley needs to go, it was a bad idea from the beginning. Our congress critters are out of touch with reality...unlike them, it is the U.S. citizen who typically suffers from the consequences of bad legislation. Of course, all congress critters care about is their political career, getting re-elected and giving themselves raises/perks.
I know what you mean. I know someone who was a QA tester in systems at KPMG in NJ and just with KPMG listed on her resume was getting calls like crazy for IT audit positions. Yet she had no knowledge of finance -- or IT auditing for that matter. It's crazy.
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