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No Escaping Sarbanes-Oxley

No Escaping Sarbanes-Oxley

by Rick Turoczy on January 6, 2005

True enough, it hasn’t been the easiest year for CFOs and their staffs. And there’s no denying that the costs of implementing Sarbanes-Oxley are high — upwards of $35 million on average for large companies this year alone. Complicating matters, the promised benefits of the reform movement are hard to spot and difficult to quantify: frauds that never happened, or the boost to investor confidence that has helped bring life back to U.S. markets.

Fears have thus taken hold that a backlash is under way. Clearly, executive complaints are reaching Washington: The U.S. Chamber of Commerce has targeted Securities & Exchange Commission Chairman William Donaldson and is compiling a dossier of examples of what it calls regulatory or enforcement overreach. And concern that the Administration’s appetite for reform — or support for Donaldson — could wane in the second term were stoked in mid-December when Treasury Secretary John Snow called for more “balance” in regulation.

Yet despite the grumbling, there is increasing evidence that reform has been well worth the trouble. Already, intense scrutiny of accounting methods and internal controls has unearthed lingering problems in the way companies operate. And fixing weak financial controls has nipped a lot of accounting problems in the bud. “You know the CEOs and CFOs are doing much more due diligence inside their companies,” says Neri Bukspan, chief accountant for Standard & Poor’s, the credit-rating service.

No Escaping Sarbanes-Oxley

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