SOX - Worthwhile legislation

Although the Sarbanes-Oxley Act has proven costly to public companies and has reduced their willingness to take risks, the legislation was necessary to maintain the perception of fairness in America’s equity markets, according to Raj Aggarwal, Kent State University’s chair of corporate finance.

The act, passed by Congress in 2002 in the wake of corporate accounting scandals at Enron and Worldcom, will cost businesses about $4.4 million dollars this year, Dr. Aggarwal said today at a meeting of the Cleveland chapter of the CFA Society, a group that promotes ethical practices among financial analysts.

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