Q&A Friday #42: Sarbanes-Oxley
Question: “I work at a large company that has had to basically completely rebuild its entire IT infrastructure to conform to Sarbanes-Oxley. (Tasks that once took less than 10 minutes to complete now can take days due to a complicated approval process geared towards accounting for every single piece of access). John, do you think SOX was actually needed, or is it a government over-reaction to a problem? Or any answer in between!” — sabiticus
Answer: Sarbanes-Oxley, which was the result of a massive overreaction to Enron and the other accounting scandals by Congress, is a classic case of the government “cure” being worse than the disease. We’re talking about such an odious piece of incredibly pricey over-regulation that foreign companies have actually delisted from our stock exchange to get away from it.
On the upside, a lot of businesses are lobbying Congress hard to gut Sarbanes-Oxley and my guess is that eventually they’ll win out. It can’t come too soon from my perspective.