PCAOB oversight benefits and challenges
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Carmen Neghina & Hella Rieger Sarbanes Oxley Act Introduction PCAOB Basic content Pros and Cons
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PCAOB oversight benefits and challenges
- 1. Carmen Neghina, Hella Rieger 2008
- 2. Content Overview Basic content Pros and Cons PCAOB
- 3. Overview
- 6. Content
- 10. Pros and Cons
Notas do Editor
- The first scandals involving corporate misconduct started arising in 2000. When the Enron/Andersen scandal first unraveled in late 2001. Followed quickly by ImClone, Global Crossing and similar stories, Congress did very little to address corporate misconduct. Then came a second wave of scandals, led by WorldCom and Adelphia in the summer of 2002. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation's securities markets. This time however Congress and the White House saw the need for action. This time the Sarbanes-Oxley act was introduced in July 2002. by Bush
- Debate continues over the perceived benefits and costs of SOX. Supporters contend that the legislation was necessary and has played a useful role in restoring public confidence in the nation's capital markets by, among other things, strengthening corporate accounting controls.
- Detractors contend that SOX was an unnecessary and costly government intrusion into corporate management that places U.S. corporations at a competitive disadvantage vis-a-vis foreign firms, driving businesses out of the US. “ These regulations are damaging American capital markets by providing an incentive for small US firms and foreign firms to deregister from US stock exchanges.” According to a study, the number of American companies deregistering from the public stock exchanges nearly tripled during the year of the Sarbanes-Oxley became law, while the New York Stock Exchange had only 10 new foreign listings in all of 2004. The reluctance of small businesses and foreign firms to register on American stock exchanges is easily understood when one considers the costs Sarbanes-Oxley imposes on businesses. The costs associated with being publicly held company increased by 130 percent.