In 2002 the Sarbanes-Oxley Act (SOX) modified the Securities and Exchange Act of 1934. SOX has presented huge challenges for companies to report their financial conditions, including tangible and intangible assets such as hardware, software, copyrights and agreements. The intent was to eliminate accounting fraud such as occurred with Enron and WorldCom. Small companies have been particularly impacted by the financial cost of complying with SOX.
Currently, Kenneth Star and others are leading a constitutional challenge of Sarbanes-Oxley. SOX "could be invalidated if any of its sections is found unconstitutional," says Marcy Gordon in Sarbanes-Oxley getting first Constitutional challenge from Starr, others. The article gives an overview of the objections to Sarbanes-Oxley. The group is "challenging the board it established to oversee the accounting industry and arguing that it violates the Constitution’s separation of powers among the three branches of government." Also, companies "want to ease its requirements for reporting on the strength of internal financial controls, because of the costs they impose."
Did SOX go too far?
