The Securities and Exchange Commission looks like holding firm to its December 15 deadline for small public companies to comply with Section 404 of Sarbanes-Oxley. But the jury is still out on whether changes announced by the SEC will cut costs for small business.
A new survey from Financial Executives International show that costs of compliance with Section 404 of Sarbanes-Oxley are down 23 per cent from last year. But look carefully at the numbers and you can see that Sarbanes-Oxley is still hurting business. Still, the numbers say it protects investors.
Analycide (death by navel-gazing), cackulating (the process of producing laughable statistics),
and execuhole (a senior manager who requests analysis and reporting but doesn't appear to read, comprehend or otherwise absorb the information) are just some of the new compliance buzzwords.
Costs of complying with the 2002 Sarbanes-Oxley financial and accounting disclosure law are leveling off, but overall compliance costs are heading north. And contrary to expectations that SOX spending would taper off, it’s now locked in at 20 per cent of overall compliance spending of $30 billion.
Employees on Wall Street are much more aware of the regulatory compliance culture and electronic monitoring of their email than their counterparts in London. But they are also more likely than their English colleagues to try and get around the controls.
Leon Gettler is a blogger and senior business journalist at The Age, specializing on management issues. His latest book, Organisations Behaving Badly focuses on the forces that lead smart executives into making dumb decisions.
