Sarbanes-Oxley, friend or foe

The Sarbanes-Oxley Act of 2002 was supposed to prevent scandals like those that brought down Tyco, Enron and WorldCom.

According to a 2008 Securities and Exchange Commission survey of officers at publicly traded firms, Sarbanes-Oxley cost the average company $2.3 million a year in direct compliance costs (staff time, documentation and external audits), compared with supporters’ estimates of $91,000 in annual costs.

The same survey found that only 20 percent of respondents believed the benefits outweigh the costs. That result echoes a 2008 report from the Association of Certified Fraud Examiners that found firms with the new controls “experienced greater fraudulent financial statement manipulations than organizations lacking these controls.”

Was it ever clear how more accounting and reporting regulations were supposed to squelch fraud?

Is Sarbanes-Oxley a case study in hysterical legislating, which always produces more harm than good?

A group of finance and accounting professionals have a better idea.  Their company,, offers an innovative solution: full disclosure.  Investment professionals gain confidence and trust in U.S. publicly traded companies.  Publicly traded companies gain investor and public acceptance of their ethics and corporate governance programs, as well as extended visibility into customers, suppliers and competitors to assess business risks and qualify business opportunities.

To avoid being blind-sided by fraud and misconduct, gives officers and directors of public companies extended visibility into the company and its management team.

At the fraction of the cost of hiring a college graduate, CFO’s of U.S. publicly traded companies can measure their ROI from using in multiples, realizing savings in such areas as insurance, litigation/indictment avoidance, and public relations, to name a few, as well as increased share value.

Who needs more federal regulations anyway?


About zethics
CEO and founder of zEthics, Inc. Thirty years of experience with finance and accounting background in public private sectors.

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