Oxley admits excessive reforms
US Representative Michael Oxley, one of the authors of the Sarbanes-Oxley act that requires companies trading on public exchanges to prove they have adequate provision to oversee accounting practices, said at a conference in London on Thursday that he agreed that some of the reforms introduced by the act are “excessive.”
He admitted that the legislation had been pushed through in a rush following the collapse of WorldCom and Enron due to accounting scandals.
He defended the principle of federal mandate of investor-friendly reforms, however, in the face of criticism that such reforms should be left to the individual states.
The act has been the target of criticism from businesses who say that compliance with its provisions costs too much. Small- and medium-sized companies also have complained because there are no exemptions in the act based on business size.
Mr. Oxley said that if he had another chance to write the legislation, e would put in more flexibility for smaller firms.
However, he also said that Congress will not reconsider the issue and that the Securities and Exchange Commission’s consideration of different rules for smaller companies will not lead to reforms of the current rules.
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