As the number of companies restating their financials increases—affecting not only their own management but also mutual fund companies and investors—businesses have begun to call on the
Last year, 10% of the 12,250 or so public companies had to restate their financials, up from less than 1% in 1997.
“Did all of these [companies] get it wrong because they were incompetent, lazy or engaging in fraud?” asks Robert C. Pozen, chairman of
The trouble is, business leaders say, not only does Sarbanes-Oxley impose more complicated standards on them, but the SEC is inconsistently and capriciously reinterpreting those rules.
The two biggest business groups leading the revolt are the
Evidently, their voices are beginning to be heard, for earlier this month, the SEC Held a special meeting to discuss curbing Sarbanes-Oxley.
Ironically, because restatements have become so common, investors don’t react as negatively to them as they did when they first started happening.