In testimony before Congress, both SEC Chairman Chris Cox and PCAOB Chairman Mark Olson testified, as Cox put it, that "those parts of SOX that aren’t working as well as they should – notably Section 404 – can be made to work better through better implementation." They're referring to Section 404 of the Sarbanes-Oxley Act, which requires companies to implement and certify extensive internal controls designed to ensure accurate disclosure of finaancial information. Compliance with section 404 has become vastly expensive - on the order of millions of dollars per year per company.
Although SOX 404 may seem like a dry and technical issue, let me remind you of what the stakes are.
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