Sarbanes-Oxley Act's Costly Side
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The paper examines the independence and control procedures laid out in the Sarbanes-Oxley Act. The paper then contends that the Sarbanes-Oxley Act, although good in spirit, has inadvertently created burdens on small and mid-sized companies with the increased costs of auditing. The paper asserts that this may have caused a slowdown in the growth of this critical component of the U.S. economy.
From the Paper:"The Sarbanes-Oxley Act of 2002 was approved in the wake of financial market uncertainly caused by the collapses of Worldcom, Inc. and Enron. Not only were the financial statements approved despite fraudulent misstatements, but the CPA's on the audit had helped management design the fraud scheles in the first place. Though good in spirit, the Act called for regulations on all public corporations, regardless of their size. The resulting burdens on small- and mid-sized have slowed the growth of this critical component of the U.S. economy.
"The independence and control procedures laid out in the Sarbanes-Oxley Act were designed for a large, complicated corporation whose investors were far removed from management. The increased costs of compliance with these requirements make being a "public corporation" far more expensive for small firms. Consequently their ability to raise capital may be inhibited by their audit budgets."
Cite this Persuasive Essay:
Sarbanes-Oxley Act's Costly Side (2005, December 01) Retrieved December 03, 2021, from https://www.academon.com/persuasive-essay/sarbanes-oxley-act-costly-side-72995/
"Sarbanes-Oxley Act's Costly Side" 01 December 2005. Web. 03 December. 2021. <https://www.academon.com/persuasive-essay/sarbanes-oxley-act-costly-side-72995/>