October/November 2006 Governance & Ethics News

• Alan Greenspan Predicts Changes in Sarbanes Oxley


• Waiting On Sarb-Ox Reform


• Cheney Expresses Doubts About Sarbanes-Oxley


• Sarbanes-Oxley Brings American Firms Record IPO Earnings Abroad


• Forbes Attacks "Onerous" SOX


• Bean-Counter Boom


• Study Finds Sarbanes-Oxley Benefits Business


• Tougher Oversight Prompts Turnover Among CFOs


• IMA Releases Landmark Study Revealing Sarbanes-Oxley Compliance Issues


• Law Gets Small Auditors to Clean Up Their Act

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Alan Greenspan Predicts Changes in Sarbanes Oxley (11/10/06) - SDA Asia Magazine
Former Federal Reserve Chairman Alan Greenspan said he expects newly energized congressional Democrats to ease some accounting requirements of the Sarbanes-Oxley Act, a landmark 2002 anti-fraud law that much of corporate America has criticized as overly burdensome.

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Waiting On Sarb-Ox Reform (11/9/06) - Forbes.com
A curious thing happened in the runup to the midterm elections. The Democrats suddenly got religion on the need to lighten the regulatory load on businesses.

Specifically, the "Innovation Agenda" that the new Democratic Speaker of the House, California's Nancy Pelosi, trumpeted during the campaign vowed to reform Sarbanes-Oxley, the package of corporate governance reforms Congress passed in 2002 after the accounting frauds at Enron and WorldCom.

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Cheney Expresses Doubts About Sarbanes-Oxley (10/31/06) - Reuters
WASHINGTON - The Bush administration expressed doubts Monday about the post-Enron Sarbanes-Oxley reforms, even as its chief markets regulator praised the 2002 law for helping uncover the biggest scandal to hit corporate America since the law was adopted.

Vice President Dick Cheney said in a transcript of an interview with business television station CNBC: "I think you can make a case that Sarbanes-Oxley went too far."

Separately, Securities and Exchange Commission Chairman Christopher Cox said a scandal over backdating of corporate stock options is spreading fast as many companies aggressively investigate themselves. Cox said that reflected a new corporate vigilance fostered in part by Sarbanes-Oxley.

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Sarbanes-Oxley Brings American Firms Record IPO Earnings Abroad (11/3/06) - Bloomberg.com
(Bloomberg) -- For all the hand-wringing over the Sarbanes-Oxley Act, the accounting and governance law driving companies away from U.S. stock exchanges, America's biggest securities firms are doing a record overseas business arranging initial public offerings.

The surge in IPOs from London to Hong Kong has enabled New York-based Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., JPMorgan Chase & Co. and Citigroup Inc. to collect $1.33 billion of fees from new share sales outside the U.S. so far in 2006, a third more than in any prior year, data compiled by Bloomberg show.

"It's irrelevant to us where companies list,'' said Nicholas Andrews, the Hong Kong-based head of Asia equities at JPMorgan. "We're able to help them in whichever market makes sense the most for their business.''

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Forbes Attacks "Onerous" SOX (10/26/06) - IT Week
Steve Forbes, chief executive of media giant Forbes, has predicted that US lawmakers will implement major changes to the controversial Sarbanes-Oxley (SOX) Act, in the wake of the sentencing earlier this week of disgraced Enron executive Jeffrey Skilling.

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Bean-Counter Boom (10/25/06) - New York Post
The mighty Google wouldn't exist today had the Sarbanes-Oxley Act been in force at its launch, experts say.

Google's startup cash would have been sucked dry overnight in red-tape audit fees required under the law, and spit into coffers of an accounting firm instead of spent building the Internet juggernaut.

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Study Finds Sarbanes-Oxley Benefits Business (10/18/06) - Newsfactor.com
Despite current calls in Congress to ease the impact of the Sarbanes-Oxley Act, an MIT Sloan School of Management professor and coauthors find that the Act's reporting and disclosure standards have brought significant financial benefits for businesses, including smaller firms that some have been seeking to exempt from the law.

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Tougher Oversight Prompts Turnover Among CFOs (10/15/06) - Post-gazette.com
The Sarbanes-Oxley Act, sweeping financial reforms enacted by Congress in 2002 in the wake of high-profile accounting scandals, have been a popular target for critics who bemoan the impact of costly, time-consuming government regulations.

The law also is being blamed for increased turnover among chief financial officers -- the top accountants at public companies whose performance has come under increased scrutiny.

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IMA Releases Landmark Study Revealing Sarbanes-Oxley Compliance Issues (10/12/06) - Business Wire
MONTVALE, N.J. -- (BUSINESS WIRE) -- A lack of practical management implementation guidance and the incomplete nature of the COSO (Committee of Sponsoring Organizations) 1992 framework in assessing effectiveness of internal controls over financial reporting (ICoFR) are two of the key cost drivers for public companies complying with Sarbanes Oxley Section 404 (SOX) requirements, says a landmark research study released by the Institute of Management Accountants (IMA®). The research study, COSO 1992 Control Framework and Management Reporting on Internal Control: Survey and Analysis of Implementation Practices, was released today.

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Law Gets Small Auditors to Clean Up Their Act (10/12/06) - International Herald Tribune
As more and more companies restate their results to correct old numbers that were wrong - whether deliberately or mistakenly - it appears that bigger companies are finally getting their books in order and that it is the smaller ones where errors are now being discovered.

And that in turn may indicate that despite rising levels of corporate anger and political lobbying, the Sarbanes- Oxley law is working and investors are getting higher quality financial statements than ever before.

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