Wednesday, August 10, 2005
The above is a link to an article on the auditing changes called the Sarbanes-Oxley Act, which covers publicly traded companies since Worldcom, Enron, etc. This piece of legislation is putting a large costs on the economy for tangible benefits. While it is a boon to my profession, by employing thousands more accountants doing mundane work of little value added, it does not help private companies who also face the burden of increased auditing costs. Mid sized firms like the one I work for have benefited from it, as private big four firms, facing double digit increases in their fees due to increased liability costs, gravitate to us in order to seek some relief. Roberto Romano does a more detailed study on the Yale Law Journal on the matter, and we find out that this is costing business billions of dollars while adding little value to users of financial statement.