Here’s a link to a Wall Street Journal article from last week on Sarbanes-Oxley and its crushing cost of compliance, disproportionately falling on small businesses. It’s all buck and no bang, spending millions on compliance, millions that could be plowed back into investment. The article says that the SEC’s small business advisory committee has recommended exempting small businesses from compliance with section 404, the most onerous section, but the SEC doesn’t appear to be willing to make that leap.
Here’s an article from Inc. Magazine on the same topic. They lead with small company with a $3 million compliance bill. Says the article:
“What’s worse … is that complying with the internal controls rules didn’t do much to enhance the company’s systems or to protect shareholders. In fact, many of the issues seemed silly.”
Might be time to re-evaluate this law, birthed in yet another Congressional frenzy and over-reaction to the headlines du jour. In a quieter time, they should take a look, see what they’ve wrought and how much good it’s actually doing.
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