When the Sarbanes-Oxley Act was enacted back in 2002, lots of lawyers and business execs predicted that it would cost a lot, that it would be a huge burden, etc., etc. According to a recent survey, however, says the NY Times Dealbook blog, “70 percent of the more than 400 respondents who have put into place accounting controls required by Sarbanes-Oxley at their companies said that the benefits outweighed its costs.” (Hat tip: Ethisphere.)
When Sarbanes-Oxley was enacted, I was the general counsel of a publicly-traded software company; I was pretty involved in our first Section 404 internal-controls assessment, which was spearheaded mainly by our top-flight chief accounting officer. Certainly in the short run the Act was a pain. It seemed clear to me, though, that in the long run the Act would compel businesses to make sure they had a good handle on their operations, and that couldn’t help but be good for business.
From my own professional perspective, I thought the Act would be a godsend for in-house counsel — it would make it easier for them to say no to overly-aggressive business people without coming across as “Dr. No,” someone who wasn’t a team player. (I hasten to add that I never had to deal with that kind of problem at my former company.)