The accounting and corporate governance reforms passed by Congress last year after a wave of scandals are working, but attempts at further change should be resisted, said a top accounting executive on Monday.
In a briefing, Deloitte & Touche Chief Executive James Quigley said: “We may not like every last provision of Sarbanes-Oxley, but if it works, then it's a success.”
Cautioning that further regulation now “would be a mistake,” the chief of the Big Four accounting firm added, “Now is not the time to complicate the environment.”
In the aftermath of the financial book-cooking scandals at Enron Corp. and elsewhere, Congress stripped the accounting industry of the privilege of regulating itself.
That job has been handed to the new Public Company Accounting Oversight Board, which has set up shop in recent months. Board inspectors are already examining the Big Four.
“We welcome the scrutiny,” Quigley said.
On the corporate governance reforms ordered by Congress in the sweeping Sarbanes-Oxley Act, Deloitte said surveys that it has done showed an impact is being made.
One of the key features of the reforms was to put more responsibility for protecting the integrity of the corporate books onto the audit committees of boards of directors.
Deloitte said its survey of 66 corporations showed that audit committees are meeting more often — with 39 companies saying their committees met more than six times a year since the act was passed, up from just 11 companies before the act.
Audit committee meetings are getting longer as well, the survey showed, with the number of companies saying their committees met for less than an hour dropping to 10 percent of those surveyed from 50 percent before Sarbanes-Oxley.