When my oldest daughter was about to celebrate her second birthday, I had heard and read ad infinitum about the woes that awaited me upon the arrival of the “terrible twos.”
In my decidedly partisan opinion, she was the most adorable two-year-old on the planet, but I envisioned the temper tantrums and the non-stop activity that would probably age me more than two years in a period of less than six months.
Yet, more experienced parents warned me that the terrible twos were overrated, and that ages three and four would be far worse.
Turns out they were right, although in my opinion, age four was far worse than three.
Lately, there’s been another four-year-old that’s been causing quite a stir, not by demanding another Barney DVD or chocolate chip cookie -- though those familiar with it complain of its high costs in both capital and time.
Yes, it’s Sarbanes-Oxley, the sweeping corporate reform act signed into law in 2002 and made necessary by mammoth frauds at Enron and WorldCom and the inability of Wall Street and the accounting profession to police themselves.
Upon its passage, those who were mandated to comply were like blind men touching an elephant tail and trying to picture the whole animal. There was a protracted period of adjustment as corporate America attempted to get its arms around the ponderous legislation.
But despite a number of compliance extensions given to smaller filers falling under a certain market cap, the complaints from small issuers about the onerous costs -- particularly for the Section 404 compliance -- began gathering both steam and supporters.
And thus the great SOX rollback movement began.
Some opponents want the entire bill repealed, while others advocate exemptions for smaller public companies.
One New York tabloid has even taken to running a regular column in its business section titled, “The SOX Menace.” The piece features commentary from various business leaders in the tri-state region championing the elimination and/or rollback of SOX. One column I found amusing was written by the president of an institution that was nearly placed in receivership.
But some who want to implement changes to SOX wield considerably more power.
Take Treasury Secretary Henry Paulson, for example.
Literally on the heels of his swearing-in ceremony, Paulson described the mandates contained in SOX as an example of the “pendulum swinging too far.”
It was obvious early on that Paulson and Securities and Exchange Commissioner Christopher Cox had differing views on the effectiveness and intent of SOX.
More recently, Paulson applauded the formation of a panel comprised of financial executives and academics who are charged with outlining possible reform measures for Sarbanes-Oxley. According to reports, Paulson has in his camp former Fed Chairman Alan Greenspan and former SEC chair Harvey Pitt.
Whatever.
The groundswell against SOX is up and running. It will be interesting to see where it lands before the act turns five.
