It is entitled the "Sarbanes-Oxley Act of 2002," and now as we approach the middle of 2004 I am still waiting for it to really kick in. I expect it still might take a couple of years for that to happen.
Why do I say this? Well, the regulations requiring SEC approval are just beginning to come out from the PCAOB, and compliance with the internal control requirements of Sarbanes-Oxley was delayed. Add on to that the fact that SEC fines are still being imposed on corporations and auditors for financial statement miscues plus auditor lapses for pre-Sarbanes-Oxley years.
Yes, auditors are being forced to stop performing prohibited nonaudit services for public companies that they audit. However, I get the feeling that public companies and auditors are just beginning to envision what they must do under Sarbanes-Oxley. After all, they haven't even gone through a full cycle with all of the requirements of Sarbanes-Oxley operating. Contrast that with the general and investing public, which to a large part is very unsure how this New World will operate and if it will even offer the desired protection.
It will be interesting to watch as this slow rollout continues while the stock market stays in a downslide, whether there is another "Enron" or "WorldCom" type debacle in the immediate future. And if one occurs, I wonder whether living under Sarbanes-Oxley will be given a clear chance or will the public view another major corporation's downfall as evidence that Sarbanes-Oxley isn't the answer?
And if the PCAOB fails through no fault of its own, how much input would the Big Four, other auditors, and multinational corporations have in the process to decide what to do next?
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