Washington (Sept. 9, 2003) -- The head of Big Four accounting firm Deloitte & Touche says a new survey shows accounting reform is working -- and predicts we'll soon look back on Sarbanes-Oxley as "the best thing that ever happened to us."
Speaking before the National Press Club on Monday, James H. Quigley said the accounting reform legislation enacted last year is positively affecting audit committees, which are meeting more regularly, and spending more time on key issues like internal controls.
"I have the greatest confidence in the integrity of our profession and the chief executive officers across corporate America," Quigley said. "Clearly they understand the importance of Sarbanes-Oxley to restoring public confidence in American business. Five years from now, we will look back on Sarbanes-Oxley and say that it was the best thing to have happened to us."
Of the 66 companies Deloitte surveyed, the number of audit committees meeting more than six times per year increased from 11 companies prior to the passage of Sarbanes-Oxley to 39 following the enactment of the legislation. And half the companies said that while they met for less than one hour per meeting prior to the law's passage, they now spend at least one hour discussing audit committee issues.
Despite the good news, Quigley cautioned against further corporate governance legislation until the effects of Sarbanes-Oxley are fully known.
"The real test of the success of the Sarbanes-Oxley legislation lies ahead in the next market bubble - and our compliance with the intent of the law," he said. "Now is not the time to further complicate the environment and make it more difficult for Sarbanes-Oxley legislation to have its intended effect. Now is the time to resist the clamor for new regulations."
PDI Global president and industry consultant Allan Koltin said Quigley and his Big Four peers may be praising SOX in public, but it's a different story when the cameras aren't whirring.
"Among the Big Four partners, there's a lot of resentment (about SOX) behind closed doors," Koltin said, adding that the part of the legislation designed to discover accounting fraud or improper relationships between auditors and clients "is going to come up empty."
"The partners are saying, 'If you think you're going to spot check us and find something, you're crazy,'" he said. "They can't talk that way publicly for fear of retribution, but I believe at some point public opinion will move from believing SOX and the Public Company Accounting Oversight Board is a total cure, to wondering what they really accomplished."
-- Tracey Miller-Segarra
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