Sarbanes-Oxley’s Act: Article Summary

The article Congress Should remove Sarbanes-Oxley Act by William Niskannen discusses reasons and arguments why the justness should be annulled. The Sarbanes-Oxley Act (SOA) was passed, in 2002 and was considered a response to the collapse of Enron and other corporations with similar problems. Nevertheless, the causation views this impress as inadequate, harmful and unnecessary. Firstly, the act is viewed as unnecessary because the stock exchanges had already implemented most of the SOA changes in the rules of integrated authorities in their virgin listing standards. p. 12) In other words, Exchange Commission is provided with full sureness to enforce and to approve all accounting rules and standards, as well as to control financial statements of their firms. Furthermore, Department of Justice is able to prosecute decision makers for frauds associated with securities, stocks and bonds. The author claims that Public company Accounting Oversight Boards isnt useful as it has no a uthorities to regulate remaining independent public auditors.Secondly, the integrity is viewed as harmful because it substantially increases the risks of serving as a collective officer or director. (p. 13) The author means that SOA may shell out more foreign and small firms, rather than stocks on American exchange. For example, the law suggests banning of loans to corporate officers and it leads to elimination of one(a) of the most effective tools of executive compensation. In such a way, the act reduces incentives of directors and corporate executives to receive well-grounded advice.Finally, the act is viewed as inadequate because it has proved to fail problems of accounting, taxation, corporate governance and auditing. In such a way, SOA increase the risk of bankruptcy. I approximate that the question whether SOA is effective or should be repealed is rather controversial. On the one hand, it cares for of foreign firms and small businesses, as well as fails to respond to aud iting and burdensome problems. On the other hand, it is designed as rescue program later Enron scandal. Its goal is to restore reputation and public trust in corporate sector in the USA.