Friday, July 15, 2005
Sarbanes-Oxley law goes too far, admits its author
One of the architects of the controversial US Sarbanes-Oxley legislation admitted on Thursday that some of the reforms were "excessive" and could have been introduced more "responsibly".
Congressman Michael Oxley told a London conference that the legislation "was not a perfect document" because it had been rushed through in the "hothouse atmosphere" following the collapse of WorldCom.
However, he defended the right of federal lawmakers to push through investor-friendly reforms, deflecting accusations made this week that Congress was usurping the role of individual states to draw up corporation laws.
The Sarbanes-Oxley legislation, based on bills introduced by Mr Oxley and Senator Paul Sarbanes in 2002, sought to clean up corporate America following the spectacular financial scandals that engulfed Enron and WorldCom and which cost investors billions of dollars.
Mr Oxley, an Ohio Republican, is chairman of the influential House financial services committee, which oversees the financial services industry, together with the US Treasury, Federal Reserve and regulators. Mr Sarbanes is a Maryland Democrat.
Sarbanes-Oxley requirements, such as the need for companies to test their internal financial controls against fraud, have angered members of the US business lobby, who claim it has led to big rises in compliance costs.
posted by Brian Moran @ 10:37 AM