“People are simply fed up with being held hostage by the accounting profession, and the big accounting firms are clearly hurting the process of going public,” wrote David Weild, former NASDAQ vice chairman and executive vice president, in a recent letter to the SEC, and posted at PEHub (copies available to subscribers only):
In the view of many seasoned professionals, the cost and time required to clear the accounting profession post Sarbanes-Oxley has undermined the process of going public and accessing the public markets. Many issuers now avoid the public markets altogether. Many venture capitalists now avoid making investments where they must rely on the public markets for an exit. Is this the balance that we want?
Some industry bloggers are saying that Weild tread too lightly on his own opinions. “He makes some sober remarks,” comments Karen De Coster in a September 26th posting. “But at the same time he walks on coals, unwilling to admit that Sarbanes-Oxley (SOX) was wrong, evil, and ill-intentioned from the start.” SOX has indeed made companies probe, test, and improve the operating effectiveness of their internal controls, De Coster adds, “but don't blame public accounting firms for being too bureaucratic.” Blame the legislators, the lobbyists, the regulators, and the “political hacks who contributed to this nightmare…. Generally, the guys doing the grunt work and signing away their professional reputation [on the letter rendering the opinions regarding management's assessment of internal controls and their operating effectiveness] are putting much at stake in order to earn their paychecks.”
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