Greenspan: NOW He Says Something about Sarbanes-Oxley
Nice (HT Techdirt), but we could have used it a year or so ago, at least:
November 09, 2006
Alan Greenspan, the former chairman of the U.S. Federal Reserve, was in fine fettle Thursday, aiming sharp barbs at the Sarbanes-Oxley (SOX) rules governing U.S. public companies.
He was the keynote speaker at AMR Research Inc.’s Executive Leadership Conference in Boston. Greenspan stepped down from his role at the Federal Reserve in January after heading the agency for 18 years. In a wide-ranging look at the U.S. and global economies, Greenspan gave his take on SOX legislation, which was implemented in the wake of major corporate accounting scandals.
A lot of financial reporting is less of a historical record and more of a forecast, according to Greenspan. “What the chief accountant creates is a work of art,” he added to audience laughter. So, requiring chief executive officers and chief financial officers to sign off on company accounts is a good thing, he said, since they have the best sense of where the value of a business lies.
However, he described SOX Section 404 as a “nightmare” and extremely costly. That section requires a company’s auditor to attest to the effectiveness of internal controls implemented to protect financial reporting systems and processes.
“What can you expect when you get virtual unanimity in both houses [of government]?” Greenspan asked. “Any bill that gets that can’t be good.” He believes that the vast majority of the members of the Senate and the House of Representatives failed to actually read the bill, which passed largely uncontested in 2002.
Legislators who don’t read the legislation they’re voting on? I’m shocked …… SHOCKED (/sarcasm)
i do agrees with greenspan, in light of all the corporate scandals, the govt wanted to project a clean image , pulling in sox. lettle do they realize that these scandals took place due to collusion of parties, as long as it exists nothing can be done.
Comment by prk — November 13, 2006 @ 12:18 am
If you mean that during the late 1990s the SEC looked the other way while the bubble companies raised capital with no prospect of making money, while the GOP congress ignored what was happening, I agree.
It’s hard to tell for sure, based on your shaky comment.
Comment by TBlumer — November 13, 2006 @ 12:41 am