Sarbanes-Oxley to be watered down

US vice-president
said yesterday that the White House would be willing to lighten the
Sarbanes-Oxley legislation.

This comes after Cheney earlier admitted that the measure – aimed at
enforcing strict accounting practices which force companies and auditors to
makes detailed and lengthy disclosure of internal financial processes – may have
gone to far, The Times reported.

The Sarbanes-Oxley Act was introduced to the US in 2002
following the Enron and WorldCom accounting scandals.

A meeting held between the US Treasury and bank executives a month ago
resulted in a shift towards watering down Sarbanes-Oxley rules, which have
become a burden to the extent that several multi-nationals have delisted from
the American stock exchanges.

In a local TV interview, Cheney said: ‘I think you can make a case that
Sarbanes-Oxley went too far. The fact of the matter is, the things – when we
had, for example , Enron and WorldCom, the problems that developed from the
standpoint of those companies, whose activities were illegal before there was
any additional regulation put in place.’

The Act is to become even more vulnerable as it’s authors,
Paul Sarbanes and Michael Oxley
, head for retirement this year.

Further reading:

Sarbox driving companies away from US listing

Red tape overload hurts business

Audit watchdog to trim down Sarbox

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