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Merit of Sarbanes-Oxley Act: Improve controls or distraction

Some feel that Sarbanes-Oxley Act was necessary to ensure public companies are following the appropriate internal control procedures, after the downfall of companies like Enron and Worldcom. While others feel that all of the extra rules have made the internal controls less effective because it is difficult to ensure all of the steps are done properly when the focus has shifted to making sure all of the steps are completed.

Which group would you tend to agree with? Explain.

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Extra rules did not make the internal controls "less effective." The rules required that the controls be documented and someone evaluate their effectiveness. This required resources, no doubt. I suppose you could argue that the extra resources might have diverted attention away from areas and so the neglect hurt companies. In fact, this is ...

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