Investor confidence hasn't been pumped up by SOX.
Perhaps even more significant: A whopping 41 percent say they are not sure about the effect Sarbanes-Oxley has had on communication transparency. This suggests that many investors don't understand the legislation and its impact on businesses. "The effect of Sarbanes-Oxley seems to have blown by the average investor," said Anne Aldrich, a senior vice president at Harris Interactive, in a press release. "Even as corporate scandals have waned…organizations will need to continue to find ways to build trust in public companies among the investing population."
I think this is wrong. It isn't that investors don't understand SOX, it's that it has no teeth, and they know it. It was a feel-good measure passed by Congress in the wake of Enron so they could do their whole "rah rah we solved the problem" dance and be seen as tough on corporate governance. From what I have read (which comes primarily from reading Mrs. Businesspundit's accounting and auditing journals) companies have not embraced a new era of financial transparency. Instead, they have figured out how to do the minimum required to check off the boxes and say they comply with the new laws.
The underlying attitude isn't "let's be more honest and open with investors," because that would mean they sometimes have to report bad news, which sends stock prices down, and many companies are still obsessed with their short-term stock price. In my opinion, the government has done nothing but increase the cost of doing business while providing little protection for investors.