Presidential Agendas and the Fate of Sarbanes-Oxley

Lora Bentley reports that industry insiders are doing all they can to snag President-elect Obama's attention now -- before he takes office. As if the man doesn't have enough to do in this transition period, let alone figure out what to do about the economic mess he's vowed to fix. But the trade groups figure if they get on his agenda now, their "pet projects" will be front of mind come Jan. 21.


And they're not stupid, by any means. Everyone knows the economy is his first priority, so several are couching their requests as means to aid the financial sector. writer Sarah Brown points to former FDIC chairman William Isaac as an example:

An outspoken opponent of [Financial Accounting Standard] 157, Isaac blames the financial crisis on the two-year-old standard that explains how companies should measure financial assets and liabilities that have been marked to market. "If I were President-elect Obama, I would make that my first order of business " even before I took office," he told [Accountancy Age].

Others are focused on health care, which is also already high on Obama's list. The AARP, the Business Roundtable, the National Federation of Independent Businesses, and the Service Employees International Union have joined forces to ask for health care changes in the president-elect's first three months, Brown says.


What stands out to me, of course, is the request made by the Competitive Enterprise Institute's vice president for policy, Wayne Crews. Among other things, Crews and CEI want Obama to "roll back" the Sarbanes-Oxley Act of 2002. Obviously, it's not the first time anyone has heard that request.


But one thing I wondered even last week when I saw Newt Gingrich and David Kralik were calling for repeal of the Act: Does it make sense to do away with regulation when the economy is in the state it's in? Or would it be better to do away with Sarbox so there's room for the new regulatory scheme that's bound to come?


I honestly don't know.

Add Comment      Leave a comment on this blog post
Nov 15, 2008 5:07 AM Scott Scott  says:
I've been helping companies with their SOX compliance for the past 5 years, and from my perspective they are much better off. There was a steep investment for some of them, but that was primarily because they were significantly lacking some of the most basic control processes. I've seen their IT departments mature as a result of changes we've implemented with them ... and they are now much better positioned to succeed than they were 5 years ago. The ongoing cost is not an issue if the controls are properly designed. Reply
Nov 15, 2008 9:18 AM Rod Scott Rod Scott  says:
Your article seems to indicate a wave of support to repeal SOX. However, in following back your trail of "proof" I find it to be the same old opposition, individuals or organizations that do not want regulation. SOX has moved on and the external auditors are not imposing the same draconian requirements they did originally. The argument remains- would it be an improvement to not require good internal controls in our businesses? Reply

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