Dvorak Says Sarbox Must Go

Lora Bentley

It's not unusual to find tech journalist and author John Dvorak's work referenced here at IT Business Edge. The tech press is what we're about, after all. But for some reason, I never expected to reference it in a Sarbanes-Oxley blog.


But his June 16 Market Watch column is titled Repeal Sarbanes-Oxley. I had to find out why, of course.


Simply put, Dvorak argues that Sarbanes-Oxley is responsible for killing innovation in the tech sector and giving investors nothing new and fast-growing to bankroll. He says:

No CEO can handle going from high-flying and aggressive go-go growth to slamming on the brakes to become the CEO/personal auditor of the company fretting about ridiculous details.

And he disputes the idea that Sarbanes-Oxley was enacted to protect investors from fraud. The folks at Enron were, after all, "busted...using pre-Sarbanes mechanisms." Sarbox, he says, protects auditors and accountants by taking them out of the loop.


In the meantime, companies that would otherwise be traded publicly are staying private to avoid the overwhelming costs of compliance -- or going to London or other more "friendly" markets.


Dvorak's conclusion? "This stupid law has to go. Completely."

Add Comment      Leave a comment on this blog post
Jul 26, 2007 5:23 AM Steve Steve  says:
There's an old saying that "you can't legislate morality". There were laws passed prohibiting alcohol, and people still drank. There are laws prohibiting pollution of the environment and companies still pollute. And SOX or not, there will always be those who seek to enrich themselves personally at the expense of others. It's part of the human condition. Reply
Aug 7, 2007 7:18 AM Paul Paul  says:
Cone on folks! The next thing you know, SOX will be responsible for the bird's flu, the monsoons in India and global warming. SOX won't prevent corporate fraud in the executive offices - it will just make it a lot more painful for the executives that get caught.As far as quashing innovation - private firms have historically been more innovative than the "slow-moving behemoths". SOX will not, in any way, stop a truly innovative company from going public. Reply

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