Sarbox now the ‘benchmark’

Sarbanes-Oxley has ‘set a benchmark that other legislators are debating,’ the
global chairman and chief executive of Ernst & Young, James Turley, has

In a roundtable before the World Economic Forum later this month, the heads
of the Big Four accountancy firms have given their views on the highly contested

‘The Sarbanes-Oxley Act has generally accomplished what legislators intended.
Investors have more confidence in financial markets, and chief executives and
chief financial officers of listed companies are more accountable for their
organisations’ financial statements and securities filings,’ said Turley.

Mike Rake, chairman of KPMG International, said the international angle was
now the most important one: ‘Regulation should reflect the increasingly
international nature of business. At the same time, firms must respond to the
need for clear and consistent financial reporting. This requires that we move
quickly to one global standard for auditing and for accounting.’

William Parrett, chief executive of Deloitte Touche Tohmatsu, welcomed the
positive effects of the Act: ‘some businesses are benefiting from the systems’
efficiencies that are being generated by the new internal control reviews. And
these benefits will provide far greater returns and sustainability than the best
legal representation money can buy,’ he said, referring to the alternative to
regulation, legal action from shareholders in the event of difficulties.

Samuel Dipiazza, global chief executive of PwC, said that Sarbox would not be
enough to eradicate corporate scandals. Accounting firms should improve audit
quality. Investors should ensure company directors are up to scratch. Markets
needed to place a higher reliance in corporate ethics, companies needed to
invest in preventing fraud, and all those looking at companies should demand
greater transparency, he said: ‘Let’s give regulators the chance to regulate
and markets the chance to embrace meaningful change. If we do investors will
vote with their feet by walking away from companies that fail to live up to
those higher expectations.’

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