Sarboxed In? (Compliance Requirements for Your Business)

Sarboxed In?

The New Yorker: Sarbanes-Oxley is a mixed bag for companies that must comply with its mandates: it costs a lot but also provides benefits. An N.Y.U. study looked at companies known to have rigged their earnings between 1997 and 2000. Those companies increased hiring by 25 percent, while other companies grew staffs by less than seven percent. Once the crooked companies were busted, however, between 250,000 and 600,000 people lost their jobs. Another study, out of Columbia University, demonstrates the consequences to competitors of crooked companies. WorldCom's inflated profits made its competitors look inefficient. This led to overinvestment, followed by price wars, cost cutting and layoffs. These social costs justify Sarbox-style regulation, according to this author.

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