The article I reviewed was called The Sarbanes-Oxley Act: A Cost-Benefit Analysis Using the U. S. Banking Industry from writers from the Journal of Applied Business. The article discussed the damaging consequence the SOX Act has had on the American banking system. Reports collected by the Federal Reserve show that returns on assets ( ROA ) and returns on equity ( ROE ) for nonregistered ( SEC coverage ) Bankss were well better than the Bankss which were registered. Harmonizing to the Harvard Law reappraisal of 2003 ( Harvard Law Review 2003 ) . over-regulation can go counterproductive. “Companies can go routinized in regulative conformity in such a mode that they are adhering to the jurisprudence. but non the spirit. ” ( Harvard Law Review 2003 ) On a personal note. why I understand why there needs to be ordinance. I believe the authorities makes excessively many determinations without to the full understanding the deductions.
I see a batch of companies which follow the same class. Another good illustration is the Patriot Act. why the idea was echt. the executing was non good thought out. I believe people or companies who try and illicitly short-circuit the system should be penalized. but making the rigorous procedures contained in the SOC Act puts more load on companies to turn out they are upstanding concerns. I know my company has had to engage about double the sum of comptrollers we would usually utilize. merely to do certain our Numberss are dead on correct. Our buying group dedicates yearss and hours reexamining unfastened orders and seeking to do certain the ERP system is accurate and up-to-date. It is non the tie in making it one time. but we are required to make it two and three times merely to do certain.
Harvard Law Review. “The Good. the Bad. and Their Corporate Codes of Ethical motives: Enron. Sarbanes-Oxley. and the Problems with Legislating Good Behavior. ” Vol. 1 16. No. 7. ( May. 2003 ) . pp. 2123-2141.