Monday, May 16, 2005

Uncle Sam is bound by red tape - The Sarbanes Oxymoron Act

Telegraph Money Uncle Sam is bound by red tape

I found this pretty interesting considering it came from a Brit. I had written about this Here. For anyone who thinks this doesn't matter, they're wrong and should read what this Brit has to say about the affect this has on business. And for all of you corporate hating goobers out there, just remember, they do provide.....JOBS!

Recently I was appointed to the board of a medium-sized US publicly traded company. It has been an eye-opening experience. The burden imposed by the Sarbanes-Oxley Act is unbelievable.
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The initial costs of complying are at least £1.5m per company - and offer no useful benefits.

The annual cost of complying with the legislation is probably half as much again - and comes on top of all the usual audit, tax and other rigmarole of disclosures and general -government bureaucracy.

Then there is the Securities and Exchange Commission, the US equivalent of the Financial Services Authority, the Stock Exchange and the Takeover Panel - except twice as aggressive. It demands endless filings and administration that requires the creation of a whole department within a corporation. For directors, the
consequences of mistakes are severe - including criminal prosecution, with mandatory jail sentences in some cases.

And the Internal Revenue Service is so ferocious that it makes our Inland Revenue seem like old pals. The American tax code is at least as complex and inconsistent as ours but God forbid you get something wrong. Moreover, across many industries, campaigning officials such as Eliot Spitzer, the New York state attorney general, have wide powers to launch investigations and civil actions, such as his assault on the insurance sector.

You owe it to yourself to read the rest, I wonder if this couldn't have an effect on the jitteryness of the stock market.


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