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Oxley Unhappy with SOX; Blames PCAOB for Problems

Oxley Unhappy with SOX; Blames PCAOB for Problems

by Toby Lucich on April 18, 2007

Former Congressman Michael Oxley is unhappy with implementation of the corporate reform legislation that bears his name.

In an interview with CFO.com, he was asked, “Are you happy with the way Sarbanes-Oxley has been implemented?” His answer: “Not really. The law has gotten a lot of criticism.” He noted that the vast majority of the complaints center on Section 404, which requires an audit of internal controls over financial reporting.

“It was Auditing Standard No. 2, promulgated by the PCAOB (Public Company Accounting Oversight Board), that started all the problems,” he said. “It was two paragraphs long, but by the time the PCAOB was done, it was 330 pages of regulations. It was far too prescriptive and [more] expensive than anyone anticipated. So, [the PCAOB] and the Securities and Exchange Commission proposed a risk-based assessment to better define material weakness, with more emphasis on internal audit. It adds flexibility with smaller companies.”

Oxley Unhappy with SOX; Blames PCAOB for Problems

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