Relief from Sarbanes-Oxley on the way?

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What size SOX

As one of those who have actually performed SOX reviews during 2003, 2004, and 2005, I feel presenting auditor's issues might be of interest.

First, the audit community received no direction form the PCAOB. Why? PCAOB was a new organization who needed to established new regulations. Based on prior SEC and common law, the auditors were threatened with suit or lose of audit of public companies if they did not audit to the lowest common denominator. Second, the clients were all scared to death and wanted the auditor to take the full responsibility for both direction and methodology. Third, in 2004 the PCAOB unsuccessfully attempted to usurp right of the FASB to make accounting regulations. Literally, no one knew who was on first.

No one, expect maybe an ISO9001 auditor, wants to spend $1,000 to protect $10 worth of assets. The methods, processes, and risk analysis needed for SOX are not new. Rather they have been established over the last 600 years of modern accounting and auditing. In turn, SOX is not new. For the last 175 years, non-enforced legislation after non-enforced legislation has been enacted regarding the legality of internal controls. Maybe we need to enforce our laws, use reasonable assurance, and put the financial criminals in our society in jail than pay $1,000 to secure $10 worth of assets.

SOX were meant to add some teeth to the 1934 SEC Act. I think 1934 might have been 71 years ago.

Posted by: BXLE   Posted on: 06/09/05 You are currently: a Guest | Members login | Terms of Use

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