Sarbanes-Oxley: It’s Not Just For Bashing Anymore

From AAO Weblog

Kind of a rare daily double: two separate clips in the news about the Sarbanes-Oxley Act. And not one of them mentions how it’s making the sky fall!

First up, reported by CFO.com, these comments from PCAOB member Charles Niemeier from a panel discussion titled “The Burdens of Regulation: Are the U.S. Capital Markets Less Competitive?” sponsored by the New York Society of Security Analysts.

“I don’t believe that ‘regulation light’ is an answer. We’re looking at an interesting time in where these markets are developing in other countries. It would put us in an extremely dangerous position to have lowered our standards in the United States…”If we start tweaking, are we putting at risk the one thing that gives us a true competitive advantage in the world?”

A question worth asking, I’d say. Then there’s this interesting piece in yesterday’s Wall Street Journal: a study by Thomson Financial that shows IPO activity hasn’t diminished since the implementation. In fact, according to the article:

“… foreign IPOs, excluding investment funds and closed-end funds, accounted for 16% of the 208 IPOs in the U.S. last year, the highest proportion of foreign IPOs in Thomson Financial’s 20-year review…foreign IPOs in the U.S. last year raised $10.6 billion of the $45.3 billion in IPO offerings priced in the U.S. It represents a 23% share of IPO volume sold last year, the highest level since 1994.”

Maybe all that foreign money is being raised here because the companies like what Sarbanes-Oxley might be doing for stock prices: there’s still a valuation premium for raising capital here – despite the higher banking fees.

http://www.accountingobserver.com/blog/