Sarbanes Oxley – What the Accountants Think

This comes from the Journal of Accountancy and discusses many aspects of the new Sarbanes Oxley law and how financial reporting will be affected by the new changes. I don't agree with this last part:

Furthermore, requiring management to certify that the financial statements—and other financial information included in the reports—fairly present the issuer's financial condition, as well as the results of operations, will force management to become more engaged in the financial reporting process. Drosdick said: "The dumb CEO is no excuse any more. There will be zero tolerance. Companies must find CEOs who understand financial statements." Keane added, "Some companies will improve their reporting, and some of their disclosures will be clearer." In addition, the CEO and CFO must report their conclusions about the effectiveness of the internal controls in their company. The majority of interviewees believed the potential for increased discussions on the company's internal controls by top management and the audit committee could have a positive impact on financial reporting.

Sure CEOs need to understand financial statements and discuss them with the audit committee, but does a CEO really need to spend time making sure all the accountants did their jobs right? I think CEOs have better things to do, which is why there is a CFO at most large companies. In my opinion, if CEOs just quit playing Wall Street's beat-the-quarterly-earnings-estimate game and adopted conservative accounting policies, they could focus on managing the business instead of managing the financial statements and we would all be better off.