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Sarbanes-Oxley, have we created a monster?

Sarbanes-Oxley was created in response to the Enron and Worldcom accounting scandal. The basic idea behind this act is to insure that companies have transparent and accurate financial information. However it seems that people have taken this regulation and have stretched its interpretation and meaning to the point of madness, even security protocol for non financial companies dealing with individuals that have no access or influence to financial records have now fallen under this act. Someone is making a lot of money on this, and its killing some small business Where do we get clear information as to how far this act needs to go?

Update:

Pete must work for an accounting firm, the point is that it's real goal has been stretched far beyond reason and logic. It just a scare tactic that accounting firms use to take companies for all they have. Buying a battery for a smoke detector has now become a paperwork nightmare requiring dual signatures and expense rationalization reports.

http://realclearpolitics.com/Commentary/com-12_21_...

http://www.aei.org/publications/filter.all,pubID.2...

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  • Anonymous
    1 decade ago
    Favorite Answer

    SOX has nothing to do with small businesses, it only applies to public entities...so I don't see how you can say it is killing some small businesses in and of itself. If you are implying that being transparent in financial accounting puts a strain on banks and other institutions that assist small businesses, you have a serious hole in your logic, and should consider adding a quite a bit more to your statement.

    And yes, it does affect non-financial institutions in how they report, among many other things. This act is in place to protect investors, especially the smaller ones. This may be the first thing I've ever heard that says it somehow a bad thing.

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