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Oxley's Statement on the Sarbanes-Oxley Act's Fourth Anniversary

Rep. Michael Oxley (R-OH), in a statement issued on the fourth anniversary of the Sarbanes-Oxley Act, said he believes that the era of questionable corporate governance is coming to a close. During his first term as chairman of the Financial Services Committee, Oxley said that corporate accounting scandals and the legislative response consumed a great deal of the Committee's time. The economy and the capital markets continue to benefit from Sarbanes-Oxley, in his view. He also pointed to the efforts by regulators to make the provisions of the Act more cost-efficient.

Oxley believes the high costs of implementing the section 404 internal control provisions of the Act are due to an overly zealous implementation of its provisions rather than the text of the Act. He urged the SEC and the PCAOB to continue their efforts to help companies comply with the Act and to provide further guidance to public companies and their auditors.

Oxley also maintained that the Act is clearly needed, given the compliance problems uncovered at Fannie Mae. He said that Fannie Mae is attempting to recover from an $11 billion accounting scandal that was not completely exposed until Fannie had to comply with the Sarbanes-Oxley Act. Executives were forced to admit that Fannie's internal control over financial reporting was not effective, he said.

Jacquelyn Lumb