U.S. Companies Getting a Grip on Sarbox? Maybe...

Lora Bentley

New research from Compliance Week suggests that U.S. public companies, as well as foreign public companies listed in the U.S., are finally getting their arms around Sarbanes-Oxley reporting requirements. The study looked at 9,700 public companies and found that they reported substantially fewer "material weaknesses" this year than last year.


According to MSNBC:

The study finds that the number of "material weaknesses"... fell to 5.9 percent from November 2006 to May this year, compared with 16.7 per cent in the 12 months to November 2005.

Compliance Week's Matt Kelly says it's evident that companies are learning to better manage Sarbox compliance.

After three years, corporations are doing a much better job identifying and remediating problems.

What that may mean is that Sarbanes-Oxley is not as much to blame for some of corporate America's ills as first thought. As writer Jeremy Grant points out, other countries are emulating Sarbanes-Oxley with their own corporate reporting laws, and studies on the economic competitiveness of the U.S. suggest that the "aggressive litigation environment" is a bigger problem than Sarbox's tough compliance requirements.


All that doesn't mean public companies like Sarbanes-Oxley any more than they ever have, but it may mean they hate it a little less.

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