Sarbanes Oxley – Section 404
May 1, 2008
The hand ringing by corporate chieftans has been constant since the day that SOX became law. It has been clear to all in corporate America that SOX was too expensive and it should never have been imposed on the system. Public company CFO’s have been complaining about the costs and gave projects of the death of public company ability to raise capital because of the extreme costs.
Clearly, these costs should never have been mandated to be incurred in one year, but the FCPC Act required the system of internal controls to be implemented. It is clear that 25 years later, companies were finally required to implement, and the CFO’s complained. Sorry, they spent al that time, not doing what the law required, and then they were mandaqed, or they would go to jail. It is amazing what sanctions can accomplish.
Well today it was reported that the costs of 404 are going down. My answer is…of course they are. Once controls become routine, they work, and they cost less. My prediction is that, some day in the future, CFOs will assert that 404 was the best thing they could have done to focus attention on cost effective controls.
