Monday, December 19, 2011

Interesting Research on the Effectiveness (or lack thereof) of SOX Section 404 Internal Controls

Interestingly, the cost of SOX compliance is widely perceived as having a chilling effect on IPO's of small-cap companies and the actual de-listing of many of other small cap firms. Perhaps this "cost" may be a necessary evil to the extent we saw some broader positive impact on better controls and transparent financial reporting. But in the aftermath of the 2008 near financial collapse, and the disintegration of Lehman, AIG meltdown and more recently MF Global, can we say with a straight face that Sarbanes-Oxley is working?  Would we be even worse off without it?


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