Big 4 firms, public companies join to roll back SOX

Paulson

Treasury Secretary Henry Paulson says the pendulum has swung too far. Meet the Committee on Capital Markets Regulation.

Frustrated with laws and regulations that have made companies and accounting firms more open to lawsuits from investors and the government, corporate America — with the encouragement of the Bush administration — is preparing to fight back, the New York Times reports today, in the top story of the Sunday edition. The story is getting major coverage worldwide, signifying the beginning of a new level of debate over SOX.

Now that Enron’s Jeff Skilling has been sentenced, the political climate could be right to roll back SOX, according to Steve Forbes. He told a reporter for the U.K.’s IT Week, “I think there is going to be, and should be, a relook at Sarbanes Oxley in a more calm atmosphere now that Jeffrey Skilling is going to be out of circulation for a while.”

But in Houston, where memories are still raw with Enron, Houston Chronicle business columnist Loren Steffy, says, the pendulum has swung for a reason.“Paulson is parroting the stance of the Chamber of Commerce,” says Steffy, “which has been calling for Sarbanes-Oxley’s repeal since before it was enacted. That’s the biggest danger with pendulums: Once they start moving backward, they don’t stop until they return to the place they started. That may suit the Pendulum Pack just fine, but it’s not good for investors who are still trying to recover losses from the last round of corporate scandals.”

“Has corporate America no shame? Or no memory?” asks Ben Stein. The columnist in the New York Times business section (and former Nixon speech writer, author and Ferris Buehler’s high school teacher): It’s fine for corporate bosses to be lobbying to keep themselves at the trough. That’s what we expect of them. But Mr. Paulson is sworn to represent all of the people, not just the powers that be on Wall Street. He is way, way too high up the pay scale to be their lackey. Maybe it’s time for him to back off this committee and start thinking of a legacy that includes law, integrity and responsibility to more than just the chosen few of Wall Street and the corporate boardroom.

Paulson’s “views, his support for the Committee, the Committee’s composition and its contacts with government all suggest that the findings of the Committee will have significant weight. If the Committee’s report favors deregulation, it will be no surprise at all if legislation is introduced in January (when the new Congress convenes) to roll back portions of SOX or to make other changes in line with the Committee’s recommendations,” according to Amalie L. Tuffin, a Raleigh, N.C., attorney writing in Local Tech Wire.

Some say it would be no surprise if it happened sooner — just after Election Day. The proposals being drafted could end-run Congress and give the Bush Administration the ability to simply act through the SEC’s rule-making process.

See also these news statements:
— IMA: ‘Support Much Needed SOX Reform’
— SOX Study: IMA issues report on SOX compliance problems
— New Independent Non-Partisan Committee to Study Capital Markets Regulation

Posted at October 29, 2006
Filed Under BSG [CPA TRENDLINES] |

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