Sarbanes-Oxley's Writ Is Offensive And Damaging To Business
The Sarbanes-Oxley Act is like dropping a glass vase from a great height: the main impact is clearly felt where it falls, but shards and splinters can cause damage at some distance. Recent visits by US audit inspectors to the London offices of Ernst & Young will confirm the worst fears of those who believe US regulators have sweeping international ambitions. A new approach is needed if national watchdogs are to co-operate in regulating international companies efficiently and effectively.
Unhappiness about the inspection should not be directed at the staff from the Public Company Accounting Oversight Board. Indeed, the fact that they and their UK counterparts are still on speaking terms suggests that they carried out their mission sensitively. The act requires them to produce reports every so often on foreign audit firms with US-listed clients: in the current regulatory climate, it would have been an unenviable task for the PCAOB to explain why it had relied exclusively on the work of others.
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