Being in the banking industry, the last few years we have heard about one regulation more than any other: Sarbanes-Oxley Act (SOX). SOX was passed in the wake of the ENRON scandal (and many others) where companies were shown to have been using questionable accounting and bookkeeping practices to make themselves look to be in a stronger financial position than they were. SOX aims to put into place controls in every organization to ensure this can not happen again.
The problem is, according to a round-table discussion of leading executives, its costs are far exceeding its benefits. What does this mean? Most likely that in 10 years, when the scars of Enron are mostly forgotten, SOX will be entirely repealed. Better to fix it now, than to go back to the wild west when CEOs had almost no responsibility for the accuracy of their books.
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