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AEI: Sarbox Needs A Fix

In a recent speech(summary) at the National Economist Club, American Enterprise Institute for Public Policy (AEI) fellow, Alex Pollock called for the law to be reformed.  Mr. Pollak believes Sarbox, an overreaction to a handful of financial scandals, is bad for investors since the law’s costs greatly outweighing its benefits.  

The debate about the Sarbanes-Oxley Act will rage on for some time.  Companies continue to fine tune their implementation of the law into their daily routines, auditors continue to refine their expectations of what companies are required to do to comply with the law and their own audit responsibilities under the law.  Regulators continue to tweak interpretations of the laws requirements and debate possible reforms to the law.  One thing is certain (no…actually two things are certain), first, their appears to be consensus building that Sarbox should not be repealed, but rather that further guidance and interpretations should be issued to ensure the law is being used as it was intended to and not hurting U.S. capital market competitiveness with burdensome regulations and required control systems. 

Second, to be successful, students must be familiar with Sarbox and be comfortable with its requirements before hitting the corporate world.  One place to start is the Act itself.  Can’t handle the entire law?  Realcorporatelawyer.com has posted this summary of the law.  The SEC has a “Spotlight on Sarbanes-Oxley” resource that provides links to Sarbox related rulemaking, press releases, special studies and more.   Also, take a look at U.S. Treasury Secretary Henry Paulson’s speech on competitiveness of U.S. capital markets for a summary of concerns the Act may be having.

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Filed under: REAL WORLD

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