The current financial reporting system "is broken," according to a KPMG representative quoted at MSNBC recently. Six of the world's top accounting firms (PricewaterhouseCoopers, Ernst & Young, Deloitte, KPMG, BDO and Grant-Thornton) say the quarterly financial reports put together and verified according to Sarbanes-Oxley requirements need to be replaced by real-time, Internet-based financial information that can be accessed easily -- and preferably more often. The story said the group was slated to release a joint paper advocating a new system today in Paris.
Along with real-time reporting, the firms also want the financials to include more information, such as customer satisfaction, product defects, patent awards and/or employee turnover rates, which would help investors to gain a more accurate picture of a company's current and projected value.
Most who want to do away with Sarbox or change it significantly argue that it went too far, that it's too complicated. The accounting firms see it differently. To them, Sarbanes-Oxley did nothing other than stabilize the already ailing financial reporting system. They say now is the time to toss it out completely and start over.