The Economist offers up a briefing paper on the Sarbanes-Oxley Act, which recently turned 5. The Economist thinks "Sarbanes-Oxley is not as bad as it's cracked up to be." The Economist is wrong. But at least they still know where to go for a quote:
Better still, under pressure from the SEC, the Public Company Accounting Oversight Board has changed its guidance on how to implement section 404. Until now, auditors have been encouraged to be zealous with internal controls, replicating much or all of the work of a firm's internal auditors, and testing the robustness of internal controls against every imaginable risk. The new audit standard, which was approved by the SEC this week, allows a more pragmatic, commonsense approach. Some estimates suggest that compliance fees could fall by as much as half.
Yet, as seems to be the way with SOX, not everyone welcomes this reform. Stephen Bainbridge, the author of “The Complete Guide to Sarbanes-Oxley”, argues that “nothing the SEC has done or plans to do will change the existing incentive-structure for officers and directors. The firm's top management will still have plenty of incentives to spend shareholder money on protecting themselves from SOX liability.”
