In a recent American Chronicle article, Mary Anne Simpson argues that no matter how many laws are passed and regulations imposed, greed will still drive individuals to cut corners and pad their own pockets. As an example, she points to a situation in Germany, where one company's execs are suspected of paying out more than $500 million in bribes to public officials. Bribery is illegal in Germany, but that didn't stop these execs from doing it.
The same goes for crooked accounting in public companies, she seems to say. Yes, Congress enacted Sarbanes-Oxley in an effort to stop it -- or at least seriously stifle it -- but even the most complex regulatory scheme won't eliminate it. Therefore, Sarbanes-Oxley has done nothing but create more work and greater expense for public companies. Especially the small to mid-sized ones that can't easily absorb the cost of compliance.
We agree that you can't legislate morality. And it's probably true that another Enron is inevitable, as Theodore di Stefano suggests in an E-Commerce Times piece. But we're not so sure that Sarbanes has done nothing.
It has increased investor confidence in company financial statements and can make money for companies that have mastered the science of effective internal controls. What's more, di Stefano himself notes that even though Sarbox can't out and out prevent another Enron, it goes a long way toward lessening the possibility because of what it requires of an audit committee and outside auditors.