Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.
We really don't foresee any scenario where a politician would denounce a piece of legislation with his/her name on it but since the mainstream media has the tendency to bludgeon the Enron/Andersen/Sarbanes-Oxley mantra into everyone's gray matter, Ox figured he'd better get on record saying that SOx might be the most important moment in US history since the Louisiana Purchase.
When asked if pols can ever stop corporate malfeasance, Ox more or less compared it to Law & Order, "We have laws against homicide and people kill one another every day. That doesn't mean that you back off and stop fighting."
When asked if SOx was a success, we expected a resounding, "You bet your ass it's a success!" But he was a slightly more reserved, saying that you should only imagine a world without SOx if you want to scare the bejeezus out of yourself:
"Sarbanes-Oxley was all about accountability and transparency and restoring investor confidence. We lost almost $8 trillion in market capitalization in 2001 and 2002 because of fraud at places like Enron and Worldcom.
Even though the recent meltdown has hurt confidence again, things could have been much worse if accounting regulations had been as lax as financial regulations."
There's the magic E word! Maybe we should try focusing on the Tonys as opposed to being so negative when it comes to Enron?
So what about this financial regulatory reform, is this a drag or what?
"Critics and the financial press said that Sarbanes-Oxley was rushed through, even though it actually took eight months from the time of the first hearing on Enron until the passage of the bill.
Now, more than a year since the financial crisis, Congress hasn't dealt with regulation and people are criticizing politicians for moving too slowly. But by taking more time Congress has had a chance to delve into complicated and multi-faceted issues like too-big-to-fail, over-the-counter derivatives, and bank regulations. This is heavy lifting and I give the Congress a lot of credit for working hard to put something together."
Do you think Congress would work on something for eight whole months and it would end up being a failure? If elected representatives work on something for that long, it's bound to be an unmitigated success.
Is Sarbanes-Oxley a failure? [Fortune]