Comments on: Sarbanes Oxley and the Bailout http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/ Entrepreneurship, Startup Companies and Business Philosophy Fri, 20 Nov 2009 20:31:15 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: Cindy Franks http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9300 Cindy Franks Tue, 30 Sep 2008 20:43:49 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9300 To repeal Sarbanes is to buy into having government buy out all these worthless loans, along with the idea that they will somehow be worth something in the future. Sarbanes simply made publicly traded companies tell the truth about the health of their companies. It is relevant to the discussion only in the sense that to suspend it might allow the current (failed) bailout plan to work. It should be no surprise that the Bush government is pushing another version of relaxing regulations on big business. Isn't that how we got here in the first place? Evolve! To repeal Sarbanes is to buy into having government buy out all these worthless loans, along with the idea that they will somehow be worth something in the future. Sarbanes simply made publicly traded companies tell the truth about the health of their companies. It is relevant to the discussion only in the sense that to suspend it might allow the current (failed) bailout plan to work. It should be no surprise that the Bush government is pushing another version of relaxing regulations on big business. Isn’t that how we got here in the first place? Evolve!

]]> By: jb http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9299 jb Tue, 30 Sep 2008 16:18:36 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9299 My view of SOX is that it requires CEOs and CFOs to "mean it" when the sign off on their financial statements. Fundamentally, they are standing by its accuracy. Is there an increased price for accuracy - of course there is. But Enron and others showed us the downside of having CEO's who don't take responsibility for the accurate presentation of financial statements. Why does "mark to market" make sense - it says that if an asset is not worth what you paid for it, then deal with it. financial statements are supposed to be an accurate snapshot in time, Does this have adverse implications? Of course it does. And it should! My view of SOX is that it requires CEOs and CFOs to “mean it” when the sign off on their financial statements. Fundamentally, they are standing by its accuracy. Is there an increased price for accuracy – of course there is. But Enron and others showed us the downside of having CEO’s who don’t take responsibility for the accurate presentation of financial statements.

Why does “mark to market” make sense – it says that if an asset is not worth what you paid for it, then deal with it. financial statements are supposed to be an accurate snapshot in time, Does this have adverse implications? Of course it does. And it should!

]]> By: Bill http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9284 Bill Mon, 29 Sep 2008 15:58:06 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9284 SOX has cost too many companies absorbent costs and affected their profits. Who benefited; the lawyers and auditors. SOX has chased too many companies out of the US and weakened our infrastructure. The lawyers changed an important word “unethical” and made it legal… I know right from wrong. SOX crippled our establishment. Financial controls; blaa... you want the truth or unethical truth! SOX has cost too many companies absorbent costs and affected their profits. Who benefited; the lawyers and auditors. SOX has chased too many companies out of the US and weakened our infrastructure. The lawyers changed an important word “unethical” and made it legal… I know right from wrong. SOX crippled our establishment. Financial controls; blaa… you want the truth or unethical truth!

]]> By: Back it up http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9273 Back it up Mon, 29 Sep 2008 07:49:34 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9273 I have not read SOX so I can't say I'm an expert. But, I have a funny feeling if I did, it would prove ineffective in preventing the problems we have now. My understanding of SOX is that it is about enforcing accounting disclosure and transparency. The current crisis is about two things: government reducing the interest rate too low for too long and financial institutions leveraging the created excess capital (excess created the by the Fed's low rates) and then spurring selling of mortgages and other weird, opaque, or what every you want to call it dept instruments in excess (if not in some cases in fraudulent or negligent ways). So, again SOX given they way it seems to work doesn't cover this problem at all. I have not read SOX so I can’t say I’m an expert. But, I have a funny feeling if I did, it would prove ineffective in preventing the problems we have now.

My understanding of SOX is that it is about enforcing accounting disclosure and transparency.

The current crisis is about two things: government reducing the interest rate too low for too long and financial institutions leveraging the created excess capital (excess created the by the Fed’s low rates) and then spurring selling of mortgages and other weird, opaque, or what every you want to call it dept instruments in excess (if not in some cases in fraudulent or negligent ways).

So, again SOX given they way it seems to work doesn’t cover this problem at all.

]]> By: OilyGasMiner http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9104 OilyGasMiner Fri, 26 Sep 2008 20:07:14 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9104 Lela You’re the first blogger I’ve encountered this week to discuss the implication of SOX in all of this bewilderment. I too feel many a wrinkles forming as I try to grasp my mind around the current state of our market. However each time I begin understanding just a little bit, I’m bombarded with news of something with of even greater confusion. I consider my self fairly well educated, and I can’t imagine the thoughts of the average working class citizen. Perhaps the media is being used as a tool to initiate this confusion? If there is a fire with out smoke, how do we identify where the real fire is? Please keep in mind that our trade deficit is reaching the $7TRILLION dollar mark<a href="http://www.stockresearchportalblog.com/2008/09/update-desperate-people-do-desperate-things/" rel="nofollow">Source</a> Wonder how they’re treating those accounting figures. You made an excellent point with the write downs to PV. If we have AAA debt and CCC debt being combined in multiple packages (bonds) which have been broken up and reassembled countless times, what are actually in these packages. A piece of paper saying “IOU”? If the SOX law is not removed this might further complicate the assessment of the bonds leading to more opaque government actions. I say we just go back to basic cash accounting and call it a day. Have a great weekend everyone! Lela

You’re the first blogger I’ve encountered this week to discuss the implication of SOX in all of this bewilderment. I too feel many a wrinkles forming as I try to grasp my mind around the current state of our market. However each time I begin understanding just a little bit, I’m bombarded with news of something with of even greater confusion. I consider my self fairly well educated, and I can’t imagine the thoughts of the average working class citizen. Perhaps the media is being used as a tool to initiate this confusion? If there is a fire with out smoke, how do we identify where the real fire is? Please keep in mind that our trade deficit is reaching the $7TRILLION dollar markSource Wonder how they’re treating those accounting figures. You made an excellent point with the write downs to PV. If we have AAA debt and CCC debt being combined in multiple packages (bonds) which have been broken up and reassembled countless times, what are actually in these packages. A piece of paper saying “IOU”? If the SOX law is not removed this might further complicate the assessment of the bonds leading to more opaque government actions. I say we just go back to basic cash accounting and call it a day. Have a great weekend everyone!

]]> By: Ann Laurence http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9103 Ann Laurence Fri, 26 Sep 2008 18:39:15 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9103 I worked for Xerox. We had to abide by all of the financial guideline laid on us by SOX. What I want to know is why SOX was NOT used against the CEO's of Lehman, Fannie's, AIG, etc. Why were these CEO's NOT held "personally liable" for bad deals done by their corporations? I know that my Finanacial CFO's and CEO were "held personally responsible" and could have faced both heavy fines and even prison time. It is a mystery to me why this legislative tool is NOT being used. Can you explain this to me? Clearly, the "media" is clueless. thanks, Ann I worked for Xerox. We had to abide by all of the financial guideline laid on us by SOX. What I want to know is why SOX was NOT used against the CEO’s of Lehman, Fannie’s, AIG, etc. Why were these CEO’s NOT held “personally liable” for bad deals done by their corporations?

I know that my Finanacial CFO’s and CEO were “held personally responsible” and could have faced both heavy fines and even prison time.

It is a mystery to me why this legislative tool is NOT being used. Can you explain this to me?

Clearly, the “media” is clueless.
thanks,
Ann

]]> By: CoolProducts http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/comment-page-1/#comment-9101 CoolProducts Fri, 26 Sep 2008 18:19:25 +0000 http://www.businesspundit.com/sarbanes-oxley-and-the-bailout/#comment-9101 Yesterday at the beginning of class a fellow classmate in my 300 person Finance lecture asked the professor what her opinion was on the $700 billion buyout. She did not seem happy that he asked, most likely because she herself was confused with the entire mess and didn't know what to say on the spot in front of 300 eager-to-learn students. Today in my law discussion, my T.A., a law student, said one of his most intelligent professors, a "tax genius", who normally has all the answers was as well baffled. Myself, being a student, am not very sure what to think at all! I try to watch CNN every day and grab a copy of the WSJ, but I must say, I am like you and am simply too confused! Yesterday at the beginning of class a fellow classmate in my 300 person Finance lecture asked the professor what her opinion was on the $700 billion buyout. She did not seem happy that he asked, most likely because she herself was confused with the entire mess and didn’t know what to say on the spot in front of 300 eager-to-learn students.

Today in my law discussion, my T.A., a law student, said one of his most intelligent professors, a “tax genius”, who normally has all the answers was as well baffled.

Myself, being a student, am not very sure what to think at all! I try to watch CNN every day and grab a copy of the WSJ, but I must say, I am like you and am simply too confused!

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