Sarbanes-Oxley seriously Misconceived

Given the state of the economy and relatively robust corporate profits, one would expect the stock market to be higher. One factor may be the Sarbanes-Oxley legislation, enacted in 2002 as a knee-jerk reaction to the corporate scandals of Enron, WorldCom and others, says Bruce Bartlett, a senior fellow with the National Center for Policy Analysis.

Estimates of the cost of the legislation in terms of higher audit fees and lost productivity have risen every year, as companies learn more about how its provisions.

It is now commonly estimated to be about $15 billion per year, or about $1 million per $1 billion of sales.

AIG, the big insurance company, has said that it is spending $300 million per year on Sarbanes-Oxley compliance.

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