New York (July 29, 2003) -- As the passage of the landmark Sarbanes-Oxley Act is poised to celebrate its first anniversary, former Securities and Exchange Commission Chairman Arthur Levitt told WebCPA that above all, the legislation has effectively “changed the culture of the boardroom.”
“There has been a shift in power from management to the board because of it, (Sarbanes-Oxley),” Levitt said. “And that’s partly out of respect and partly out of fear.”
The sweeping reform act, drafted to stem the swelling tide of massive corporate scandals, was signed into law July 30, 2002.
Levitt said that other vital benefits of the act included the creation of the Public Company Accounting Oversight board and the future independent funding of the Financial Accounting Standards Board.
“However, I don’t think anyone understood the costs of compliance,” he said. “As a result there has been a very expensive battery of businesses -- consultants, lawyers and advisors - that have emerged and eventually will have to be sorted out. These new businesses will eventually become redundant however, as companies realize that compliance is common sense and not necessarily a whole new series of rules and regulations.”
-- Bill Carlino
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