While the Financial reform law was seemingly beaten to the post by a filibuster threat in the early hours today, The 2002 corporate governance law, commonly referred to as Sarbannes Oxley Act, was upheld by a Supreme Court judgment allaying fears that the voluminous documentation of internal controls required by the law would result in its being brought down in Monday’s rulng. Though accounting oversight in the law has been repealed, PCAOB (Public Company Accounting Oversight Board) will continue as an advisor for the regulations.
WSJ.com was our reference for the report as Monaco looked a bit dull..
The accounting industry applauded the ruling. “This is the least disruptive decision,” said Center for Audit Quality Executive Director Cindy Fornelli. “We’re pleased the court made it clear the PCAOB could continue to function. … It’s important for investors.”
Barry Melancon, president of the American Institute of CPAs, said, “The court rejected a transparent attempt to undermine the post-Enron reforms that have served our financial markets well.”
Bill George, a former CEO of medical-device maker Medtronic Inc. and current director of Exxon Mobil Corp. and Goldman Sachs Group Inc., agreed that Monday’s ruling was “narrow,” and wouldn’t affect Sarbanes-Oxley “in any significant way.”
He said he finds the law’s internal-controls requirements overly burdensome, and said he “would like to see that fixed,” but that wasn’t at issue in the court’s ruling Monday.
Overall, however, Mr. George said he believes the reforms have improved corporate governance by bolstering requirements for independent directors and executive sessions where board members meet without the CEO.
OfficeMax Inc. Chief Financial Officer Bruce Besanko said it would be “business as usual” at the office supply retailer. He said the sections of Sarbanes-Oxley that have more of an impact on his day-to-day activities deal with internal controls and corporate responsibility for financial reporting. “What happens as a consequence of the rulings today is frankly not important,” said Mr. Besanko.