Sarbanes-Oxley Goes to Supreme Court

On May 18, 2009 the U.S. Supreme Court announced it would hear a constitutional challenge to the Sarbanes-Oxley Act of 2002, a law that mandated costly accounting procedures of questionable effectiveness in the wake of the Enron and WorldCom scandals. Attorneys from the Competitive Enterprise Institute are serving as co-counsel in the case, representing pro bono a small accounting firm in Nevada burdened by the Sarbox mandates.

CEI's John Berlau, writer of the popular Youtube public policy video "Sarbanes-Oxley and Tattoos," explains the nuts and bolts of Sarbox in this video, and why Sarbox overhaul is now needed more than ever to bring growth to this sluggish economy. Berlau explains how issuing stock has traditionally helped smaller companies during a debt shortage, but how Sarbox means a brick wall -- through the tripling of audit costs -- for companies that try to go public now. Berlau shows how Sarbanes-Oxley did not catch the current scandals and harms honest entrepreneurs, and shows why repealing it could be one of the best economic stimulus packages we could have.

Category:

News & Politics

Tags:

• sarbanes-oxley
• supreme
• court
• tattoos
• enron
• stimulus
• economy
• youtube
• sarbox
• sox
• small
• business
• competitive

[caseyjones22]

I think SOX is an effective bill. It creates a lot of accoutability among officers that normally wouldnt be there. It also imposes STIFF sentances for officers that even conspire to commit fraud. I read the bill and there are WAY more important things in the bill than 'trivial' things as this guy claims. Considering it cost the federal gov't 3.4 BILLION dollars to pay off one man's misappropriation (keating, Lincoln S&L) that destroyed an entire towns economy some effective reg. is a small price

[CEIdotorg]

@caseyjones22 The point is that the requirements to document trivial "internal controls" in the PCAOB's interpretation of Section 404 has become the most costly part of the law -- $5 million on average for a public company -- while delivering little tangible benefit for shareholders. As I said, it has become the Accountants' Full Employment Act with auditors looking over companies' document minutiae like who has the office keys. For all this cost, it did nothing to prevent the subprime meltdown.

[caseyjones22]

@CEIdotorg I don't see how a CPA firm finding out who has the keys would cost $5 million. Are those the only internal controls that a firm must document? because I don't think that would cost $5 million. If you're paying that kind of extra money I'd think there would be more investigation into internal controls. I like how you put it in quotations aroud internal controls to try to make them seem less legitimate. And I don't think monitoring the mortgages banks sell falls under the scope of SOX.

[MooseOfReason]

@caseyjones22 Their website says they were established by Congress, so I'm sure Congress has some authority over them.

[caseyjones22]

@MooseOfReason Isn't that because that the PCAOB is a non-profit and not a gov't agency

[ezequielm305]

this guy is like a "uh?"...every 2 seconds.

[BobLaw22]

this guy doesn't know what he is talking about

[8Wonderboy]

yp:)

[8Wonderboy]

As usual//