Control freaks

Sarbanes-Oxley

April was a cruel month for Sarbanes-Oxley afcionados. In the US, the Securities and Exchange Commission held an all-day “round table” discussion to refect on the Sarbox corporate law reforms, listening to representatives not only from US companies but also from the likes of BP and Siemens.

The headline in the New York Times captured the flavour of the discussion—“Here it comes: the Sarbanes-Oxley backlash.” While few companies called for an outright repeal of Sarbox, or even the controversial Section 404 on internal controls, there were many complaints about cost. Representatives from the big four accounting firms said the 90 clients they collectively surveyed put the cost at nearly $8m (€6.2m) on average. Robert Hodgkinson, who represented the UK’s Financial Reporting Council, says costs at most companies have turned out to be up to 20 times higher than original estimates.

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