As an aspiring writer, my mother was once approached by a huckster-in-training in her Brooklyn neighborhood of Sheepshead Bay, who assured the-then impressionable 10-year old he could get her an “almost new” typewriter for the grand total of two cents.
She patiently waited at the pre-arranged venue, her head spinning with visions of banging out the great American novel on her bargain-basement purchase. Two hours later, it dawned on her that both the seller and the typewriter were official no-shows and never-wases.
She tearfully recounted the story to my grandfather, who with his trademark Camel cigarette and engrossed in that day’s edition of a long-ago shuttered newspaper, The Daily Mirror, didn’t look up from his favorite section -- the comics -- but calmly told his eldest daughter, “Caroline, you have to consider the source.”
Sage advice, perhaps, when considering those who have railed longest and loudest about Sarbanes-Oxley in general and Section 404 in particular.
Take, for example, former Ohio Congressman Michael Oxley, R-Ohio, one-half of the famous corporate reform hyphenate, who, in a recent interview, said he was rather unhappy with the way Sarbanes-Oxley has been implemented.
He laid a healthy portion of the blame on the Public Company Accounting Oversight Board and AS2, which became, as he put it, “far too prescriptive and more expensive,” than initially anticipated.
Oxley, who retired earlier this year after a quarter-century in Congress is now the non-executive vice chairman at Nasdaq, where his role is to encourage companies to list on the exchange.
Oxley told a national publication that SOX is flexible enough to allow overseers to enact changes and subsequently shed excess auditing and review costs.
To be fair, Oxley opined that he didn’t feel that SOX had slowed economic growth and that it restored investors to a level of comfort that was absent several years ago. He also noted the mandate accelerating the timetable for reporting insider deals.
However, I find it odd that during the first three years of the SOX’s implementation, the congressman did his best impression of Marcel Marceau on the subject. But now that his job is to help corral new listings for Nasdaq, the legislation suddenly has morphed into an expensive and cumbersome exercise.
Prior to the final version of SOX being adopted, I was told by those familiar with the situation that the more stringent guidelines of the legislation were in fact those put forth by Sen. Paul Sarbanes, D-Md., when both he and Oxley had each drafted separate reform legislation for the Senate and House, respectively. One insider told me that when the American Institute of CPAs told attendees at its 2002 Spring Council meeting that it favored Oxley’s bill to Sarbanes’, it was proof enough that Sarbanes’ bill had far more regulatory “teeth.”
The PCAOB and the SEC are more or less in agreement that some tweaks to SOX are in order, the scope of which are yet to be determined. So few doubt that some massaging of the legislation will likely ensue.
But even with changes, the one constant to any rule is there will always be critics and complainers.
To that, I know what my grandfather would say.
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