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Column: Below the surface of the cost of Sarbanes-Oxley:

Column: Below the surface of the cost of Sarbanes-Oxley:

by Rick Turoczy on November 17, 2005

Bashing Sarbanes-Oxley, the law Congress passed to rein in corporate-accounting abuses, is popular locker-room banter among executives. But it has gotten out of hand. On Sunday, Georgia-Pacific Chief Executive A.D. “Pete” Correll suggested avoiding the law was a reason to sell his company to privately held Koch Industries. “You get used to spending your shareholders’ money” on the law’s provisions, he told reporters. “But that doesn’t make it right.”

Some commentators took Mr. Correll’s suggestion even further. Sarbanes-Oxley, my former colleague Larry Kudlow told his CNBC audience, “is clearly leading to these privatizations.”

Well, slow down, folks. A little perspective is in order.

A recent study by Foley & Lardner LLP found that all the costs associated with being a big public company averaged $14.3 million last year. That was up 45 percent from the year before, due largely to the requirements of Sarbanes-Oxley. But for a company like Georgia-Pacific, it’s still not that big a number.

Column: Below the surface of the cost of Sarbanes-Oxley

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