Firms Struggle with Sarbanes-Oxley Compliance

Note: this is slightly off-topic, though we reserve the right to discuss all kinds of governmental compliance, medical privacy, and identity theft issues here!

Investor’s Business Daily has an article talking about how firms are struggling with Sarbanes-Oxley:

Business executives are lined up to give government regulators an earful about their struggles and costs in trying to comply with strict new accounting rules, at a public hearing set for Wednesday in Washington, D.C.

The Securities and Exchange Commission called the meeting to gather feedback on Section 404 of the Sarbanes-Oxley Act of 2002, the toughest part of that landmark law. Congress passed the law after accounting scandals erupted at Enron, WorldCom and elsewhere.

The first phase of Section 404 took effect in November. The mandate requires that managers vouch for the accuracy of their financial results and for the “controls” or systems put in place to assure such accuracy. Chief executives and chief financial officers who fail to adhere to these new rules could face stiff fines or even prison terms.

Many companies say they’ve had troubles complying, and that might be an understatement.

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