Informed that we were devoting our cover story to a look at the five-year anniversary of the Sarbanes-Oxley Act, attorney Stephen Poss, a staunch critic of the legislation, responded: "Are you going to drape the issue in black ribbon?"
We considered red instead, for financial loss, but ultimately decided on blue, the better to reflect the general CFO mood regarding Sarbox. After all this time, finance executives are still unhappy with the legislation; as recently as May, three-fourths of them said it should be repealed or reformed. Critics like Poss argue that the legislation puts CFOs at risk of "career capital punishment" should something go awry on their watch. He also contends that, far from boosting investor confidence, as was its stated aim, the legislation has left many investors in the cold as companies rush into the warm embrace of private equity.
Sarbox has had many ripple effects, but as our story ("Five Years and Accounting") makes clear, apart from recent fixes to Section 404 compliance, the prospects for further reforms look dim — at least for now. For better or worse, the post-Sarbox landscape has matured.
Which doesn't mean it's become easier to navigate. In recognition of that fact, this month's story will inaugurate a three-part series on how corporate finance has changed since the law was passed. In the August and September issues, CFO will look at how power has shifted among the regulatory bodies that rule accounting, and dissect the changes in the rules themselves.
As for the appropriate color schemes for those impending stories, let's just say that we haven't ordered any brightly colored inks.