Is it time to water down Sarbanes-Oxley?

[CPA]

Originally posted by: WHAMPOM
Now, who audits the accounting firms for their compliance? Are they not public , with stockholders?

Audit firms are not public. They are partnerships. Partners hold "stock" in the company.

 

[SSSnail]

Originally posted by: CPA

Originally posted by: SSSnail
I didn't even read the article, and according to your title, I think it needs to stay. There are nothing wrong with holding company and the people that are responsible for its financial well being responsible and report FACTUAL earnings.

So by reporting factual earnings, and in the process "losing financial glow", so be it. Internal fraud has so be accounted for, and that's not something that can be ignored. If they comply, the money that they can potentially save from exposing these fraud cases are more than enough to pay for the process. Why in the world would anyone want a shiny shell with no substance?

Yes, compliancy to Sarbox is a bit stiff, but once they find a repeatable solution, the figure is almost only the initial cost. With all fortune 100 (I'll even give you global 2000), 3.8 mil is what they spend a year on toilet papers (give or take a few). Please don't give me that "hardship" argument crap.

Edit: Oh, and for those of you that don't know, Sarbox applies to ALL global companies that are publicly traded on the NYSE. So, doesn't really matter where they're HQ or their Execs move to.

Edit 2: Basically, "politicians" want other EnRons, where they can get paid and their buddies not jailed. If anything, the financial market will gain stability and new investors with confidence.

Go through what I go through on a monthly basis and your opinion may change. There are other ways of holding the company responsible other than nitpicking every single transaction (slight exaggeration, but it's the worst part of my job).

Well, you do receive a paycheck don't you?

 

[techs]

Ken Lay is looking up from that place he went and cheering us on.

 

[Fern]

Originally posted by: yllus
Okay, so those of you in the fiscal sector, what do you think of Sarbanes-Oxley? Does it go too far? Should smaller companies be permitted to "opt out" of certain provisions, as long as shareholders are clearly notified? It's an interesting little development, and quite cross-party in nature. You'll note that Mayor Bloomberg (R) and Senator Schumer (D) are both on board with this.

I was recently working with a "start up" firm and their "IPO" efforts. Prior to Sarbannes Oxley the process was already very expensive and time consuming. It appears taht Sarbannes0Oxley is, in fact, forcing such companies to pursue capital in other markets. Notably in England (The A.I.M. market if IIRC actually advertises itself as releif from Sarbox) and Germany.

So, yes it is having the effect of shifting capital markets to outside of the USA.

Originally posted by: spidey07
Sarbox is a joke meant only to fatten the wallets of accounting firms that had faced their own self created scandal.

So let's see....the auditing companies got shook up for their incorrect procedures and accountability. I know! Let's pass legislation that mandates business for the auditing companies!

You are aware that the firm Aurther Anderson (Enron auditor) was adjudicated innocent (or not guilty) in the courts. Right?

Even accounting students will know that audits cannot overcome collusion (two or more corporate employees/officers scheming to defraud). And clearly there was collusion among the officers of Enron. And of course, the attornies who helped devise the scheme and wrote opinions that the accountants are bound by got off "scott-free".

If fact, IIRC it was AA which caused Enron downfall when they uncovered problems and refused to issue a clean opinion.

Oh, by the way, the off balance sheet treatment of (foreign?) partnerships was acceptible under accounting rules.

Originally posted by: sandorski
I heard/read recently some analyst suggesting that London had already become the Financial World Leader, rather vague as that is. Interestingly and coincidently, in 2006 the Euro surpassed the $US for the first time in the amount issued. That might be just a one time thing, but if it's a trend the Euro will eventually replace the $US as the Global Currency, most likely.

Yes, this is precisely what is happening and it is a direct result of Sarbox

Originally posted by: Tom
Compare it to the losses from fraudulent activity before it was passed ?

If corporate slime have a new home in UK or EU, good riddance.

It's too premature to make such a comparision, or at least a valid one. This stuff is usually only uncovered after a period of years has passed.

Seems to me Sarbox is primarily a method to help hold Directors and Officers accountable. When problems arose, many used the excuse "I didn't know, I relied on so-n-so, he fooled me too" etc.

So, it may help in some instances, but certainly not all.

Oh, I'm sure accounting firms appreciate the extra business, but as usual this was done by Congress - not for accountants - but to make themselves look like they are doing something to address the problems. If anybody is going to ultimately benefit from this it will be trial lawyers. I'll bet they pushed for it. Imagine lawyers twisting and spinning all this complicated sh!t to a jury (not made up of accounting professionals who understand thi stuff) of "normal" people. There will be some "big paydays" down the road a ways. And it will be for lawyers, not shareholders or accountants.

Oh and you won't find a strong lobbying group for/by accountants, no thats trial lawyers. How many members of Congress are accountants? I think there might be one. How many are lawyers? The vast majority.

Fern