“There’s just such a deep private capital market,” said David Lynn, a former SEC attorney who is now a partner at Morrison & Foerster.
If Trump and Clayton want to make big changes to Sarbanes-Oxley, they will need Congress’ help.
In the House, a wide-ranging financial regulation bill could be introduced as soon as this month that would exempt more companies from Sarbanes-Oxley’s internal control requirements. These audits, which are meant to ensure public companies have adequate safeguards to prevent fraud, collectively cost corporations billions of dollars annually.
Once the legislative wrangling begins, business lobbyists said they will try to get lawmakers to strike down even more of Sarbanes-Oxley. Chief on their list is a mandate that CEOs certify, under the risk of criminal penalties, that their companies’ financial results are accurate. Accounting firms, too, may make a push to overturn the law’s so-called independence restrictions, which bar them from doing many kinds of consulting work for audit clients.
Enron Return?
Should that happen, “it would take less than five years to get back to Enron,” said Lynn Turner, a former SEC chief accountant who helped write Sarbanes-Oxley.
This article was provided by Bloomberg News.
“This is not how you create jobs,” Turner said. “That is a figment of someone’s imagination.”