Sunday, November 14, 2004

US starts to count cost of corporate clean up

As Sarbanes-Oxley nears full implementation the implications are clearer. As corporate America completes the final stage of a three-year marathon to reform its governance standards, attention will inevitably turn to the question of whether it has all been worth it.

This Monday marks the trigger point for the last, and most expensive, part of the Sarbanes-Oxley legislation that lies at the centre of this response to scandals at Enron and WorldCom. It also comes amid an unprecedented backlash in the business community, as many executives warn that other measures being pursued by the Securities and Exchange Commissions, the Financial

The question of whether proposed restrictions on their freedom outweigh the desired improvements in company behaviour may ultimately prove impossible to measure. But the concluding chapter of Sarbanes-Oxley is now allowing some assessment of its costs, and the long-feared section on updating and documenting internal management controls may not be quite as bad as some initially feared. The dreaded Section 404 is actually quite short.

US starts to count cost of corporate clean up

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