Last week, while attending a regulatory conference in New York, I overheard an attendee bemoaning the additional costs his firm had to shoulder as a result of Sarbanes-Oxley compliance.
While I just caught the tail end of his polemic, I did manage to eavesdrop long enough to catch the fact that his IT costs alone went up "significantly in double digits."
Despite the fact that I consider myself fortunate enough to be an investor in this country and one who welcomes any measure that improves the financial reporting process, I did feel a bit of compassion for him.
I think most of us know what it's like to be hit with additional and unexpected costs. Sort of like the time I was in my new home for a week and noticed the dining room wall rapidly turning a sickening shade of brown -- an unmistakable sign of a broken water pipe.
The only one who benefited from that experience was the son of my plumber -- by now I've paid for his first three years of college.
But it could be worse.
No, make that a lot worse.
Consider the recent events in China, where that country is conducting a crusade against financial fraud. To describe this state-run effort as a bit overzealous is to say that a few Enron executives borrowed from petty cash.
In lieu of jail time for a quartet of perpetrators convicted of fraud to the tune of US$15 million, the Chinese saved a few citizens from jury duty obligations by simply executing the financial prestidigitators.
This rather draconian alternative to prison comes as several of China's largest banking institutions prepare to go public.
Two of the banks -- China Construction Bank and Bank of China -- are preparing to launch IPOs of $10 billion and $4 billion, respectively.
That's a lot of yuan.
The method of execution wasn't immediately clear but it does sort of underscore that country's need for some type of formal policy regarding fraud detection and corporate reform.
Not that executions in China are all that rare.
Various reports estimate that the number of people given free cemetery plots in lieu of prison cells ranges between 5,000 to 10,000 on an annual basis. Most are in response to crimes such as murder, but believe it or not, some have been enacted for such seemingly innocuous acts as pinching someone's rear end.
That law would probably prove disastrous here, especially during Greek Weeks on college campuses.
But on more serious note, the next time someone complains about the costs of compliance in the U.S., you can remind them of the price of non-compliance on foreign soil.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access