Senate debates interpretation of SOx
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Senate debates interpretation of SOx

As former Enron senior executives Kenneth Lay and Jeffrey Skilling came to trial this month, the Sarbanes-Oxley Act itself has come under scrutiny. At a hearing of a US Senate Committee focusing on accounting and regulatory standards, Paul Sarbanes defended the report he co-authored, arguing that good corporate governance practice was profitable as well as ethical.

Sarbanes cited a report of 2,500 international companies which showed that the implementation of the Sarbanes-Oxley Act had led to a 10% improvement in their relative share price performance.

Sarbanes commented: ?We have been reminded during the past year that non-US companies are not immune from Enron-like breakdowns. Large public companies in Italy (Parmalat), the UK (Shell), the Netherlands (Shell) and Canada (Norton and Hollinger), most of which are listed in the US, are now faced with evidence of poor internal controls, weak corporate governance, and substantial audit failures.? 

He claimed that strong internal controls guarded against corruption and fraud by producing the verified information without which the ?gatekeepers? ? such as independent board members ? cannot do their jobs.

Douglas Flint, group finance director at HSBC, was more guarded about the benefits brought about by the Act.

Gift this article