Oxley Admits SOX Is Inflexible

by Glen Shapiro, LawAndTax-News.com, New York

01 November 2005

Speaking at a recent panel discussion, co-creator of the Sarbanes-Oxley corporate governance legislation, Rep. Michael Oxley (R-Ohio) acknowledged that the Act should have been more flexible.

Responding to criticisms of Section 404 of the legislation, which pertains to management assessment of internal controls, Mr Oxley announced that:

"I think it's a legitimate criticism of the act and especially 404, that it's a one-size-fits-all solution."

Speaking with regard to small businesses, which are especially affected by the provision, he went on to add:

"It would be a shame if the law were to force these folks to go private and deny them access to capital they need to grow...And to the extent this complicates that, we need to take a look at it."

According to the New York Law Journal, he explained that it was likely to be a very long time before Congress revisits the legislation, if this ever takes place. However, he admitted that Sarbanes-Oxley has gone "far beyond" the intentions of its authors, and suggested that the Securities and Exchange Commission could consider adopting a more flexible approach to implementation.

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