A Bloomberg report describes the folly that is the Sarbanes-Oxley Act. SOX has caused companies to divert resources from consumer-serving operations into the installation of new computers and the hiring of additional accounting workers. SOX forced Yellow Roadway Corporation to hire 10 additional employees and 20 consultants to help write new accounting software. The extra $10 million it spent could have purchased 130 heavy duty truck cabs.
SOX has caused auditors to interpret audit control rules in a draconian fashion, for which their fees have ballooned. For example, auditors typically require non-core bookkeeping activities of a company to be documented, no matter how irrelevant. The auditors claim they must require an unreasonable level of accounting documentation in order to avoid lawsuits and scrutiny from federal inspectors.
Helping their clients by using more rational interpretations of SOX is illegal. A vague auditing standard dictated by the Public Company Accounting Oversight Board prevents auditors from communicating with their clients because such client service would compromise the auditors’ independence and subject them to conflicts of interest. I am not making this up.
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Not exactly related, but in the same spirit – Congress has decided that not enough legislation is the reason that LexisNexis lost our information (the most important of which are social security numbers, ironically enough).
http://news.yahoo.com/news?tmpl=story&u=/ap/20050413/ap_on_go_co/identity_theft
The part that gets me is that the government is imposing levels of care about private companies’ books that itself is no where near implementing itself. The information control for the US government are so poor that attempting to do audit procedures on such information is impossible and no opinion can even be attempted to be expressed on them.
Now that’s not to say that business management should not use good care in its business practices, but it is hilarious that the government is privileged to use force on them when they are the biggest hoodwinkers of all.
When I’ve had debates with folk about such double standards (including irresponsible debt and other liability take-on) between the government and private enterprise, they simply say “it’s different for government”, which is nonsense. Such rationalizing only works if one applies an irrational philosophy to the matter. While I am no apologist for Big Business (and small business for that matter) malfeasance, it is alarming how many people simply decide they don’t have to apply the same basic rules to their government. The notion of turning oversight of how business manages their affairs to an entity that can’t manage its own is patently insane to me.
Japan is a socialism country as you know.
It’s annual government revenue is about 82 trillion yen including government bond .
but real japanese general policy expenditure is 320 trillion yen.
Surprise!
Government has never made their closing account.and has never accounted to citizen.
Japanese government’s expenditure have been strictly confidential.
Furthermore Japanese government have no double entry bookkeeping system.
These facts were revealed by Kouki Ishii who was a house of representative member and also a philosopher of law.
But he was assasinated by a yakuza 2 years ago.
Of course,Japanese police covered up the truth of his assasination.
and japnaese financial service agency are going to enact Sox act also in japan.
I saw that Prevari was doing some free focus groups related to Sarbanes Oxley. Maybe it’s worth checking out.
http://www.prevari.com/registration.htm
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