Could Sarbanes-Oxley be working?
Four years after the financial scandals rocking Enron and other large companies prompted Congress to toughen disclosure and governance laws, defenders and detractors of the legislation remain as divided as ever over whether the high costs of compliance are worth whatever benefits it's bringing about.
To date, defenders have had a hard time making their case, if simply because the law wasn't crafted as a quick fix but as a solution that would gradually yield benefits over time. Critics of the law had plenty of ammunition as auditing fees shot up into the millions for most companies.
And there have been many critics. Last year, Financial Executives International said that 94% of companies it surveyed felt the costs were outweighing the benefits. In February, the executive recruiting firm Korn/Ferry found that 58% of corporate board directors felt the law "should be repealed or overhauled."
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