Eight years ago on this this glorious day, the ‘Public Company Accounting Reform and Investor Protection Act’ (in the Senate) and ‘Corporate and Auditing Accountability and Responsibility Act’ (in the House) came together to bring us Sarbanes-Oxley.
Most of you didn’t realize it at the time but this particular piece of legislation created thousands of new jobs at Big 4 firms, only to find those people out on their asses a few years later. Oh, well. Luckily, there are plenty of options with you holders of the accounting degree.
We perused the SOx Wikipedia page to find out some things worth noting:
• It passed the Senate 99-0 but our friend Jim Peterson has said, “the inability of Sarbox to reach global-scale problems shows the futility of legislation so politically anodyne that it passed the US Senate [unanimously].”
• GWB called SOx, “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt.” This, many will argue, has now been trumped.
• The PCAOB! If it wasn’t for Sarbanes-Oxley, there would be no PCAOB. Well, and some recent help from the SCOTUS.
Anyway, we’ve probably said enough. If you have fond wishes or memories of Sarbanes-Oxley that have transpired over the last eight years, cut loose in the comments.
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If you’re a non-profit leader and free on April 12th, why not head to Washington and listen to Mike Oxley (yes, that Oxley, without whom SOX would still be the property of a certain Chicago baseball team and not the bane of accounting’s existence) speak about transparency and accountability for non-profits?
The ironic part, of course, is that non-profits don’t really have to suffer with the legislation named after Oxley but he’d like to see a little more, well, Oxley in NFP, even if it isn’t necessarily required by law.
[Oxley] will speak about the importance for nonprofit organizations to be transparent and ensure greater accountability with their financial standards to build on and preserve donor trust, strengthen the reputations of nonprofit organizations and associations, and enhance the overall nonprofit sector.
Attendees will include thought leaders from foremost nonprofits, trade associations and key congressional staff members. Both the House and Senate Ethics committee’s staff have deemed this a “widely attended event.”
My feelings on Sarbanes-Oxley have been expressed more than once here on Going Concern but I can sum them up thusly: more useful things could be done to “protect” the investor interest besides arcane SOX compliance and the PCAOB including but not limited to random auditor cavity searches, TSA-style interrogation of management, and waterboarding the internal audit team. Is Oxley trying to imply that non-profits should follow suit but only voluntarily and out of obligation to donors instead of investors?
Surely his plan is not that sinister.
Only because non-profits already have their own version of SOX in the Form 990 (which I have complained about before as well) that has all of their bases covered. The only SOX carry-overs are strengthened whistleblower protection and retention of documents in lawsuits, perhaps because non-profits may have been where Mike Oxley got his ideas.
SOX compliance costs averaged $2.9 million during fiscal year 2006, actually down 23% from the fiscal year previous according to FEI. Do you know many nonprofits who have that sort of cash lying around?
I think it might be better to get some advice from the guy who wrote the bill and start tightening up the ship just in case.
Recommended reading by April 11th if you’re checking out Oxley’s “I just want to be helpful” presentation: The Sarbanes-Oxley Act and Implications for Nonprofit Organizations (last updated January 2006). Bring a notepad.
Former Congressman Mike Oxley to Speak at Nonprofit Summit [Council for Non-Profit Accountability]