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Sunday, 10th June 2007

SOXing It to the Little Guy: How Sarbanes-Oxley Hurts Small Investors and Entrepreneurs

SOXing It to the Little Guy: How Sarbanes-Oxley Hurts Small Investors and Entrepreneurs (PDF; 155 KB)
Source: Competitive Enterprise Institute
From press release:

The report, SOXing It to the Little Guy: How Sarbanes-Oxley Hurts Small Investors and Entrepreneurs, identifies major flaws in the law, showing it can’t be merely “tweaked.” These include:

  • Section 404, the law’s most costly provision. “Section 404 forces auditors and executives to sign off not only on the accuracy of a company’s financial statements, but also on its ‘internal controls,’ a vague term which the law does not define,” Berlau explains.
  • Section 301 is another problem. It “mandates the one-size-fits-all requirements that only ‘independent’ directors sit on companies’ audit committees, intruding on the cohesiveness and efficiency of different types of boards.”
  • Section 201 “prohibits a company’s auditor from performing any other services for the firm,” a prohibition which has “caused costly duplication of many accounting tasks.”


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