The latest figures show that Sarbanes Oxley regulations made 2005 a big year for e-business, and that this will continue in 2006. But what impact will that have that on markets and other investment?


Global research firm Gartner says that this will continue to have an impact on budgets for the next three years, siphoning off spending in other areas. "Through 2008, investigation of new technologies will slow as discretionary budgets divert to regulatory compliance.''

Paul Lowengrub, from Washington-based FTI Economic Consulting, says there will be short-term costs. These include more expensive D&O coverage for directors and officers, opportunity costs as some companies become more risk averse and fewer willing to enter the market. But this could be just a short-term glitch. In the long-term, he says, more companies will find themselves at a competitive disadvantage if they do the bare minimum of compliance, and there will be substantial cost-savings down the road.

Lowengrub says three years is not long enough to fully assess the costs and benefits of SOX and that a full cost-benefit analysis is further down the track.

So how long do we need before we know?