Barking Up the Wrong Tree

A few weeks ago, The ERM Current™ included a blog entry about former US House Speaker Newt Gingrich's call for the repeal of the Sarbanes-Oxley Act.  Many of Mr. Gingrich's claims supporting his rationale that Sarbanes-Oxley is responsible for our current economic downturn were simply wrong.  Well, someone else also noted his poorly constructed argument and provided an alternative view last week in an op-ed article for the San Diego Business Journal.  Wade Lindenberger provided a compelling counter-point argument in his column as well as a practical view of the evolving nature of Sarbanes-Oxley Act compliance efforts.  He noted,

"In a time like this, people are always looking to blame something for the financial meltdown and turmoil. Sure, we are in a serious financial situation right now, but Sarbanes-Oxley is not to blame. In the six years since Sarbanes-Oxley was enacted, failures like Enron and WorldCom, which resulted mainly from finance and accounting shenanigans, have been nonexistent. The most recent failures of companies like Bear Stearns and Lehman Bros. resulted from poor business decisions and absentee risk management, all driven by good old-fashioned greed."

Those who continue to seek to repeal Sarbanes-Oxley are simply attempting to skirt the real issues at hand and also avoid future accountability for business-related fraud.  Mr. Lindenberger sums up the situation nicely by stating the following,

"When it comes down to it, the steps legislated by Sarbanes-Oxley are really nothing more than what we would expect from any thorough, well-run company."