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Just last month, I did blog entries on former Congressman and SOX co-writer Michael Oxley joining a law firm to help companies get around Sarbanes-Oxley and then joining Nasdaq.

Now he's come out in an interview claiming he's not happy with the way Sarbanes-Oxley has been implemented and blaming it on the audit oversight agency, the Public Company Accounting Oversight Board (PCAOB).

Section 404, he says, was only two paragraphs long originally. "By the time the PCAOB was done, it was 330 pages of regulations".

And in any case, he says, it was WorldCom that pushed the Senate toward adopting 404.

In other words, Michael Oxley's hands are clean. Sarbanes-Oxley might be a mess but hey, it's got nothing to do with the man who helped write the law. The problem with the act that bears his name is not his fault.

Yeah right.


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3 comments untill now

  1. Rusty Rustbelt @ 2007-04-09 18:06

    Oxley is my Congressman and he is busy feathering his own nest (the economy in his fomer district is in lousy shape).

    Rep. Boehner did a speech in the Ohio 4th recently, and his commnets on Oxley centered on Mike’s worrying about committee selections that would give him the best payoff after retirement.

  2. Friedrich5 @ 2007-04-10 07:41

    As someone who is responsible for SOX compliance in my company, I have to agree with Oxley. I cannot comment on what kind of a congressman he was but what he says is true. If you look at the SOX law,section 404, which is where all the issues are, is about 1/2 page long. When the outside Auditors saw this, I believe they saw it as a way to strengthen their positions in the companies they audit and basically “cover their butts”. Remember this was when another large auditoring firm, Arthur Anderson” was forced out of business because of their role in Enron. I believe the auditors convinced their buddies on the PCAOB to make companies provide unusual amounts of detail for the auditors when they come into the company or then threaten them to not declare them compliant. It allows the big auditoring firms to continue their scam of hiring students right out of college (smart but with no real business skills) working them until they are half dead and knowing they will not quit before 2 years because they need the public experience for CPA certification. They perform audits on companies for large fees with low costs. The companies then ratchet the requirements up internally to make sure they are compliant when the auditors arrive. The bigger the company the more ratcheting that exists. It would be less expensive to everyone if an ‘experienced’ outside auditor resided within the client company full time and watched what was ‘financially’ going on. At least they could give guidance to the company before a company got out of control. This would benefit everyone.

  3. Rusty Rustbelt @ 2007-04-10 13:05

    Obviously I meant ‘was’ my Congressman.

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