SOX-compliance too costly?
NetworkWorld ran an article entitled “Execs tell regulators than Sarbanes-Oxley costs exceed benefits“. The article has this quote:
“The Sarbanes-Oxley Act was a critical step in addressing an unprecedented string of corporate scandals that were rooted in very serious governance, accounting and audit failures,” said SEC Chairman Christopher Cox in his opening remarks. Section 404 has the potential to improve the accuracy and reliability of financial reporting, but only if it’s implemented properly, Cox said. “In practice, it hasn’t always worked out that way,” he acknowledged.
It is good that they are now reviewing the cost of SOX compliance versus its benefits. SOX was initially created to clean-up the industry of the major scandals that hit in early 2000. Companies “seem” to be cleaner and more upfront now. There are even some large players that voluntarily adjusted their books (or settled) to ensure SOX compliance and avoid any future legal and regulatory issues. However, these compliance measures come at a significant cost. Another thing to note is that this also affects companies in the Philippines with business interests in the United States. So, we are not spared from this. Since most of the complaince-related information needed lives on Information Systems, we should definitely keep our eyes open.
