The Sox does not only refer to an Amercian baseball team, but also to the Sarbanes-Oxley Act, a United States federal law enacted approximately one year after the Enron scandal was revealed and it was meant to avoid other accounting scandals and to restore public confidence in the nation’s capital markets. This wide-ranging legislation directly caused the creation of the Public Company Accounting Oversight Board in order to protect the investors by controlling the auditors of public companies.
But a lot of people, including myself, doubt the effectiveness of the PCAOB and SOX, especially regarding increased regulation, professional conflicts, increased compliance costs, corporate federalism, and lack of clarity.
Though, we shouldn’t be too hard on this government intervention because it managed to increase the confidence of investors in the markets by requiring full disclosure, accuracy and transparency. So it seems the Sarbanes-Oxley Act deserves the benefit of the doubt, at least for now.
http://www.entrepreneur.com/tradejournals/article/165359568_1.html
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