Well that makes two of us!
In a recent article on CFO.com, retired Congressman Michael Oxley expresses his displeasure with the Sarbanes-Oxley legislation, and blames it on the Public Company Accounting Oversight Board (PCAOB).
Section 404 of the Sarbanes-Oxley Act of 2002 is the part that causes the most heartburn for executives, stockholders, and the public at-large. This section requires companies and auditors to examine internal controls over financial reporting, and to report on these controls in their annual reports. (Note, however, that companies don’t necessarily have to improve bad internal controls.)
Many say that Section 404 of Sarbox was poorly implemented and is far to expensive to companies. Oxley says the following about why companbies are unhappy with it:
The main thing is the enormous cost that was driven by the outside audit. But, the auditors are under tremendous pressure too. Audits should be risk-based so companies can better assess the risks involved and move forward.
I highly recommend reading the whole story and all of Oxley’s comments.