WebMediaBrands CEO Alan Meckler
Sarbanes Oxley Is Kafka's Dream
Jupitermedia is a public company. Most readers know that as part of the Enron, MCI and other corporate scandals our "hardworking" politicians like Messrs. Sarbanes and Oxley have created the grotesque legislation known as Sarbanes Oxley.
The SOX rules and regulations are strangling public companies in a web of arcane, obtuse and absolutely ridiculous regulations. For example, our payroll manager can no longer hand me my paycheck --- it must now be hand delivered to my by our Chief Financial Officer.
More ridiculous is that our offices have been populated by five full time "professional" SOX consultants to advise us and ready us for the varieties of tests that we must undergo by our outside auditors to make sure we are SOX ready. These five people cost a ton of money. And the outside auditor too will have large charges for running the above mentioned complance tests.
Clearly Sarbanes Oxley was created as an over reaction to some serious scandals. I doubt that this legislation will prevent any misdirected cheat from stealing in the future. In the meantime the costs to corporate America are going through the stratosphere. The beneficiaries of SOX are auditing firms and and out of work accountants who are creating consulting businesses to help companies become SOX compliant.
My prediction is that within five years Sarbanes Oxley will be dumped as having proved to be cumbersome and not helpful in policing American public companies. The waste in manpower and dollars is criminal.
I know that my posts are supposed to be about the Internet, but as a CEO I must use any forum possible to protest the idiocy of Sarbanes Oxley.
It's all over the news that the economy added 337,000 jobs recently. I wonder how many of those are SOX related.
what sox should have done was limit the regulations to companies that had revenues or the number of emloyees above a certain amount rather than just impact all public companies.
Dude, who runs your company? The auditors or you and your management team? You sound like a spoiled child who has had the candy dish taken away because his parents are concerned about his health and dental hygiene.
Pardon me, but to butcher Shakespeare, "The CEO doth protest too much, methinks."
Auditors identify risks to the organization and recommend "best practices" to minimize (eliminate?) those risks. It is up to the leaders of the organization to determine what is and what isn't acceptable.
You've got several options here (not exhaustive and in no particular order, but I'd suggest #3):
1. Take your company private.
2. Become the CEO of an audit firm.
3.Make some decisions and quit leaving them to the auditors. Who in there right mind thinks that there is some risk associated with a Payroll manager giving you a check vs the CFO giving you the check? Unless there is no control (or controlled process) between you and the Payroll manager and how you get a check??
I completely understand the sentiment and the emotion. I live through this everyday in my position (mid-level mgr in Fortune500 company with numerous responsibilities around IT Financial Systems). We are spending large sums of $$$'s also to meet our (or our auditors) interpretation of what SOX requires. In some cases we're going too far, in others, not far enough. But that is my opinion from my perspective.
In general, all SOX does is hold companies accountable for things they should be doing already. Do you have appropriate process controls in place to lower to an acceptable rate the risks associated with doing business?
Put appropriate processes in place, don't use your significant influence to break or bypass the processes, and you won't have another Enron on your hands at your company.
7386 Very well said chappy.
Quite Right. Bernie Ebbers was not a book-keeper. But short of frog-marching the board to church every Sunday, where will they learn integrity?? - and it is in somewhat short supply up there. I agree that Sox is cumbersome and, more importantly, it misses the point - but a year or two of concentating on how the biz really happens won't do any harm.