Congressman Jim Cooper says he supports efforts to relax some of the corporate governance requirements created by the Sarbanes-Oxley law.
The law was created in 2002, following corporate scandals at Enron, WorldCom and Adelphia. It strictly regulates the accounting and auditing practices at publicly traded companies. Earlier this week, US Treasury Secretary Henry Paulson said the law creates too heavy a burden for companies, and that he might recommend changes.
Cooper believes the law is “90 to 95 percent good.” But the Nashville Democrat says he agrees that the regulations go too far.
“I think unquestionably we have benefited from the requirement that a CEO sign financial statements. That makes them more accountable and honest, keeps them in better touch with their own company. But some other things have been almost ridiculous in their regulatory overkill. So I’m hopeful we can find that right balance.”
Specifically, Cooper takes issue with the requirement for costly duplicate audits-one internal, and the other by an outside accounting firm. He believes that careful reviews of internal audits should be sufficient, given the strict standards Sarbannes-Oxley created for those audits.
Business groups, such as the U-S Chamber of Commerce, are lobbying to also change portions of the law that hold executives open to criminal prosecution for corporate wrongdoing.
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