Effect of Sarbanes-Oxley Act

The Sarbanes-Oxley Act does not provide for any thing which is new to corporate America. All the requirements laid down in the Sarbanes-Oxley Act were earlier present in the securities law but there was no compulsion corporate America to follow the provisions of the securities law unless there was any specific requirement under the law. The Sarbanes-Oxley Act now has made the reporting guidelines in a law which has been shoved by force in the throats of corporate America forcing them to become more transparent in the reporting of financial events as they occur. The American companies which come under the preview of Sarbanes-Oxley Act have been forced to re-do their homework in relation to their internal control processes and procedures and how these effect the reporting of financial information to the The Sarbanes-Oxley Act does not provide for any thing which is new to corporate America. All the requirements laid down in the Sarbanes-Oxley Act were earlier present in the securities law but there was no compulsion corporate America to follow the provisions of the securities law unless there was any specific requirement under the law. The Sarbanes-Oxley Act now has made the reporting guidelines in a law which has been shoved by force in the throats of corporate America forcing them to become more transparent in the reporting of financial events as they occur. The American companies which come under the preview of Sarbanes-Oxley Act have been forced to re-do their homework in relation to their internal control processes and procedures and how these effect the reporting of financial information to the public.

The one sector which has gained out of the Sarbanes-Oxley Act is the software industry. It has upgraded all its financial reporting software to comply with the requirements of the Sarbanes-Oxley Act. All companies are spending huge sums of money to upgrade their reporting on financial information to meet the requirements of the Sarbanes-Oxley Act. Automating the Sarbanes-Oxley Act compliance is the only way to reduce compliance costs.

The Sarbanes-Oxley Act being a law of land had changed for ever how the financial statements are prepared and what goes into their preparation. No law in recent history has caused so much resentment and uproar in corporate America as the Sarbanes-Oxley Act. The Government understood the need of transparent reporting after the disasters that struck Enron, WorldCom and Arthur Anderson where billions simply vanished and giant corporations filed bankruptcy. The corporate are not afraid of reporting but the reaction to his Act has been a just like reactions to any new regulations and rules which have been thrust upon them because of the complexities involved in the compliance of he Sarbanes-Oxley Act and no more. But even after the protests and reactions the Sarbanes-Oxley Act is a law and need to be followed.