Now that Congress and the regulatory bodies responsible for implementing Sarbanes-Oxley have admitted that the corporate reform law needs some work, the National Credit Union Administration is contemplating similar accounting/audit requirements for the country's credit unions.
Sarbanes-Oxley has been the subject of such criticism and grandstanding of late -- much of it justified -- that we're surprised anyone would want to model audit and accounting standards after it. Especially now that the Securities and Exchange Commission is in the process of relaxing the Act's requirements.
Granted, MLive.com reports today that the NCUA isn't planning to adopt stricter requirements immediately, so at least the regulator is considering the fact that Sarbanes-Oxley's audit requirements are currently in flux.
But even if Sarbox had received nothing but praise and wasn't in the middle of a revamp, we're not sure it would make sense to adopt similar regs for credit unions. As a credit union auditor pointed out to MLive.com, the problems in public companies that gave rise to Sarbanes-Oxley don't exist in the credit union industry. Credit unions aren't publicly owned and aren't subject to the same pressure to "get creative" with accounting in order to deliver expected results. New regulations would be "imposing a cure for an illness that doesn't exist," he says.