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ViewPoints: Sarbanes-Oxley ready for a trim?

ViewPoints: Sarbanes-Oxley ready for a trim?

by Rick Turoczy on September 15, 2006

Say “regulation” and all but the most ardent followers of business will turn the page. But the announcement this week that a committee of business leaders and academics had been formed to review the way U.S. securities markets and companies are regulated was cause for celebration by anyone who invests, saves or works for a public company. The group, with the blessing of Treasury Secretary Henry Paulson Jr., promises to look at whether Section 404 of the Sarbanes- Oxley law, which requires U.S.-listed companies to audit and report on their internal control systems, should be changed – a possibility that will cheer companies groaning under the weight of paperwork generated by the law. But the most promising part of the new group’s work is the examination of whether laws governing civil and criminal liability for auditors, companies and directors should be changed. In the five years since Enron, whose implosion led to Sarbanes-Oxley and other governance laws, the liability overhang – which crushed Arthur Andersen, Enron’s auditors, and hinders the work of the entire auditing industry – has not even been on the table; now that it is, some real progress on meaningful forms of scrutiny and control can finally be made.

ViewPoints: Sarbanes-Oxley ready for a trim?

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