Do the costs of Sarbanes-Oxley outweigh its benefits, or does the strict law protect investors enough that they are willing to pay more for stock when a company complies? These questions have been asked countless times -- and we usually get different answers each time.
At American.com, AEI resident fellow Alex J. Pollock says the only way to really get an accurate answer to the question is to make Sarbox voluntary -- at least for small businesses. If investors are willing to pay the premium that some predict for Sarbox compliance, they will, and the value of the companies that comply will increase. If they're not willing, then they're not, which means the company is wasting its time and money trying to comply.