Sarbanes-Oxley is big hit with investors
Check out 29-Jan-07 Business Week article Not Everyone Hates SOX, The much maligned new rules are a big hit with investors which makes these points:
- SOX and related reforms have produced much more reliable corporate financial statements, which investors rely on when deciding whether to buy or sell shares
- Testing internal financial controls could drive gains in corporate productivity and profits, according to Duncan W. Richardson, chief equity investment officer at Eaton Vance Management
- Executives appear to have a firmer grasp of costs when they talk about operating margins. Even not-so-good management teams have good controls now, and that leads to an ability to cut costs, according to Richardson
- Annual reports for 2006 will now contain reconciliations to any nonstandard or "pro forma" numbers that companies use to try to spin their results, according to Donald J. Peters, a portfolio manager at T. Rowe Price Group
- Beefed-up disclosure requirements result in companies now deliver numbers with fewer adjustments for unusual charges and write-offs, which in the past have been used to make earnings look better, according to Thomson Financial's Earnings Purity Index
Quality and Environmental Managers can leverage improved information quality and controls into their operations to have an impact on the corporate entity.
