Tuesday, October 11, 2005
DILLER DISSES SARBANES-OXLEY
Congress should take a hard look at the Sarbanes-Oxley Act because the high cost of complying with the law's requirements is hurting U.S. business, media mogul Barry Diller told The Post yesterday.
"Congress has a duty to revisit Sarbanes-Oxley, to see what was smart about it and what wasn't, and conform it to sensible and current practice," said Diller, CEO of IAC/InterActiveCorp, an Internet holding company.
Diller said he supports the act's requirements making top executives accountable for their books.
But he called some of the law's compliance requirements — specifically Section 404 — "ridiculous" and "incredibly wasteful."
Diller said the rules have forced U.S. firms to spend small fortunes on outside auditors and "millions of dollars internally to hire people to ensure compliance."
He said "99.9 percent of the processes" in the law have nothing to do with corporate malfeasance.
Congress passed the Sarbanes-Oxley Act in 2002, following a wave of scandals at Enron, WorldCom and Global Crossing that cost investors billions of dollars.
In a March 2005 survey of 217 companies by Financial Executives International, a professional association of chief financial officers, 94 percent said costs of complying with Section 404 far outweighed the benefits.
Supporters say some people are beginning to forget why Sarbanes-Oxley was passed in the first place.
"We're entering a phase of scandal amnesia," said Ann Yerger, executive director of the Council of Institutional Investors.
"Sarbanes-Oxley was absolutely essential to protect investors who lost billions of dollars thanks to corporate scandals.
posted by Brian Moran @ 9:19 AM