Repeal The Sarbanes-Oxley Tax Now!

from the sounds-reasonable dept

Many people agree that the Sarbanes-Oxley Act was simply an overreaction to all the corporate scandals from the last year, and that it's unlikely to do much to stop thieving, scamming execs. However, there is very real cost for companies to comply with the Sarbanes-Oxley Act, and it's hitting smaller companies especially hard. The article talks about how it's costing Borland an additional $3 million, at a time when that money could clearly be better spent. At the same time, it's creating a "cover your ass culture", according to the CEO of Tibco. Instead of responding to customer demand, they're now spending all their time looking at the possible impact of any move in accordance to the new Act. I agree that executives need to be held more responsible, but it seems that a law like this probably should have been passed after some more careful thought and discussion, instead of immediately following the exposure of some of the excesses. As it stands now, Sarbanes-Oxley seems likely to hinder many businesses without doing much to stop criminal behavior. As such, it doesn't seem particularly useful.
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  1. identicon
    Steve, 17 Dec 2002 @ 9:40am

    No Subject Given

    "All these charges take away from shareholders, and they do not help me become more transparent or grow the business."
    Dale Fuller, CEO of Borland.

    How does protecting shareholders from fraud take anything away from them? And I think he's missing the point--as far as I'm concerned, one of the main goals of the at was exactly to make CEO's less transparent. They get paid millions to run a company, and in the past, when they did illegal things, they weren't really accountable. The additional costs are in most cases optional, not required. Now that CEOs know they can face real jail time for breaking the law, they will tread more lightly. They'll pay for a lot more consultants to help make sure they're not breaking the law--but the truth is it's mostly just them purchasing a conscience.

    Don't speed and you don't need to fork over the cash for a radar detector.

    The whole thing just feels a lot like gambling in baseball. The reason it's such a touchy issue is because if some one bets on their team (especially against) the entire integrity of the game is hurt because at the most fundamental level, it has to be about playing to win or everything else falls apart. Companies releasing truthful financial statements is such a fundamental part of our market, that very firm rules and penalties need to be in place to encourage honesty at all costs. If we can't trust the financial statements, then how can anyone intelligent invest at all? The problem was in the past, a company was better off fudging the numbers and taking a slap on the wrist quarters or years later than being honest and facing the market with disappointing numbers. Hopefully Sarbanes-Oxley makes it more important to be honest and face the market than lie and face prison.


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