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Sarbanes-Oxley spurs firms to hoard cash

Sarbanes-Oxley spurs firms to hoard cash

by Rick Turoczy on July 18, 2006

Sarbanes-Oxley compliance costs “have been substantial, diverting funds and probably even more importantly, some of the attention of chief executive officers and boards of directors from capital spending and R&D; plans,” Warsh said.

Warsh, a former White House aide in the Bush Administration, said Fed economists have had difficulty quantifying the costs because “proving the connection between executives’ ‘mind share’ and capital expenditure rates is difficult.”

Warsh said he did not believe that Sarbanes-Oxley was a simple one-way street and said companies are benefiting from the reforms.

Sarbanes-Oxley spurs firms to hoard cash

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