Tighter Sarbanes-Oxley Called For
|
A Washington lobbying group has called for a tighter auditing process, curbs on excessive executive compensation and time for the Sarbanes-Oxley Act to work. The Committee for Economic Development (CED) base their arguments on the way confidence in U.S. businesses has been undermined by the misconduct in some of America's biggest companies. "Private Enterprise, Public Trust: The State of Corporate America After Sarbanes-Oxley released by the organization, discussed the state of corporate governance in the US and offers some recommendations. "At the launch was SEC chairman, Christopher Cox. """The high-profile corporate scandals of the past few years, coupled with numerous problems regarding financial statements, have shaken shareholders' trust in many business leaders and their companies,"" said Roderick M. Hills, CED's Co-chair, and Chair of the CED subcommittee on Corporate Governance. ""It is imperative that we take concrete steps to restore the practices and processes that are the foundation of good business ethics. Specifically, I believe that the auditing process must reflect responsibility by company leaders, and not just a rigid dherence to accounting rules. The auditing process needs to be guided by an over-arching set of principles that guarantee that the CEO, Board of Directors, and other top company officials know that they are fully committed to providing a truly fair and clear presentation of the firm,"" Mr. Hills continued. Roderick Hills is a former Chairman of the SEC and is currently a Partner at Hills, Stern and Morley. "Recomendations from the report include: * Making audit committees more autonomous and vigorous. This includes exerting the same control over internal auditors as external auditors. * Ensure users are aware that financial statements are based on judgements. To back this, CED would have fewer rules. * Give Sarbanes-Oxley time to work. The CED does concede though that the infamous Section 404 requirements could be tailored. The Public Company Accounting Oversight Board (PCAOB) and SEC guidance is given an endorsement. * Small companies should not be given a blanket exemption from Sarbanes-Oxley. Their costs should be mitigated though. * Tame Executive compensation. In particular the huge gulf between top executives and the average employee. Independent directors should make up the core of the compensation committee.
|
Related Articles
Similar Areas Selected Books Keywords Sarbanes-Oxley and compensation Committee for Economic Development Sarbanes-Oxley and small companies Section 404 and small companies
|