According to those more experienced in such matters, I'm told the proper gift for a fifth anniversary is wood. To mark my five years of wedded bliss, I asked for a new wood driver. My wife, astutely predicting that such a gift would provide an entrée to spending weekends on the golf course in lieu of sharing domestic duties, instead bought me a hand-carved in/out box.The financial community recently marked a five-year anniversary, although not everyone was rushing out to locate the gift register. It's been five years since the Sarbanes-Oxley Act was signed into law, and exactly what type of wood gift one would purchase to celebrate that milestone depends largely, I would assume, on the giver.

Wall Street and scores of publicly traded companies would probably, by and large, opt for a Louisville Slugger and a chance for a free swing at co-authors Sen. Paul Sarbanes, D-Md., and Rep. Michael Oxley, R-Ohio (both now retired), citing the exorbitant costs in money and personnel required to comply with the corporate reform legislation.

The accounting profession, which prior to the July 30, 2002, passage of SOX was perceived as possessing the same level of integrity as a sidewalk watch salesman or a wrestling promoter, would no doubt opt for something a bit more thoughtful, as a sort of back-door thank-you for creating a new client service niche and the ability to demand higher auditing fees for SOX Section 404 compliance attestation.

Ditto for securities regulators, who have praised the effect the legislation has had on corporate accountability and helping pare down the spate of accounting scandals, which prior to the passage seemed to be surfacing with a frequency that could be best described as "alarming."

SOX has impacted virtually every aspect of the financial reporting process, while literally changing the landscape of American business and how companies operate. The act also mandated the creation of the Public Company Accounting Oversight Board, a body that - following a number of early missteps, particularly with staffing matters - has assumed the role of audit gatekeeper for public issuers, posting its inspection reports on registered audit firms.

As with anything of this magnitude, there are downsides and unintended consequences.

Small filers have had to shoulder far larger costs, proportionately, than their Fortune 100 counterparts, while the accounting profession as a whole wasn't even close to being trained on how to handle Section 404, so they attacked in their usual way - with checklists.

One expert opined that it will take at least a "generation of accountants" to really get comfortable with SOX, and as a result, it appears as though we're going to have Sarbanes-Oxley to kick around for a number of years.

And for those interested, the 10th anniversary is tin.

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

Don't have an account? Register for Free Unlimited Access