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Finance Allah Shmoop What is Sarbanes Oxley socks Well It

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was a moment in time when it seemed that nearly

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every major company was riddled with lies Deceit and chicken

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hree fake accounting off balance sheet tricks outright fraud There

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was WorldCom and in Iran and Cendant and Lucy's psychiatry

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stand All right In two thousand two It was as

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if every morning greeted Wall Street Journal readers with a

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new onslaught of how America was really a corrupt angry

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tricky Dicky society of financial bed Weathers And in fact

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it turns out well yes there were a few really

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bad weather's but his things usually do overtime Karma spoken

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The bad actors were jailed and found and stamped out

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like mice who accidentally wandered into an elephant sanctuary happens

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And in the ashes of all of those bad land

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discoveries came a new set of laws revolving around how

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proper accounting in disclosure should work And the leader of

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that pack was socks or Sarbanes Oxley The act which

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stipulated ah whole raft of procedures that companies had to

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follow in filing public accounting documents The lion share of

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those docks comprise the ten K annual and the ten

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Q Quarterly's which went from being a twenty pages long

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to something like sixty seventy eighty pages It was the

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greatest boon for CPS everywhere as the need for re

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ALOF deters nearly doubled overnight tons of little things had

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to be checked confirmed and turn your head and cough

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by outside parties The CEO's trip to Hawaii was that

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really unnecessary business trip Did he really need to take

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his mistress with him to take dictation The four hundred

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dollars for surfing lessons A business expense Really Well if

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he was the CEO of Oakley sunglasses and maybe you

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could make that argument But his head of a sea

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Delko sellers of windshield wipers and not so much in

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fact socks found enormous volumes of little fraud rampant across

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many many filings and in amazingly short periods of time

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was really just a few years Most of those smaller

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fraudulent corporate leakages were cleaned up with haste and to

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the bane of ambulance chasing lawyers who were used to

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getting rich off of suing companies for fraud Well the

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downside of socks was that it was blanket form meaning

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that it treated General Electric the same way it treated

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etc Tiny company's doing only a fifty million dollars in

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revenue We're required to make the same detailed filings as

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behemoth company's Doing desa billions in revenue is that behemoth

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could advertise that fifty million dollars in audit expense across

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an enormous base The tiny companies could not sew socks

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Compliance costs became a meaningful expense too Small companies that

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had precious few resource is to apply to growth so

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subsequent to Sarbanes Actually a number of amendments were made

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that allowed for small companies to quote file light Basically

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the level of detail required in cross checking was minimized

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and a kind of tiered structure began to be applied

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to companies of different scale and scope Such that the

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increased government scrutiny on accounting practices and the legalities of

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transactions was not in fact heavy friction to the normal

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highly competitive business practices living out there on the horizon

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So Sarbanes Oxley exist today in all its living glory

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producing second and third homes for partners in large aqui

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accounting firms everywhere giving them plenty of spaces Teo you

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know wet the bed

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