SOX Center

As U.S. regulators and industry recognize Sarbanes-Oxley’s fifth year this July 30, most investors (57 percent) in a new survey by Pepperdine University’s Graziadio School of Business and Management believe the requirements imposed by the law, holding CEOs and senior management personally accountable for the accuracy of their companies’ financial disclosures, are about right, while one-third (31 percent) say its restrictions did not go far enough. Only eight percent say the law went too far.

The study on investor attitudes toward CEOs and their corporate boards finds almost nine out of ten investors say that jail time should be mandatory for corporate officers and board members convicted of practices harmful to employees, shareholders and the public. Four out of five investors surveyed favor actions by prosecutors to aggressively recover company losses from convicted executives and/or board members’ personal assets.

Yahoo!Finance: Study: Investors Say Sarbanes-Oxley Got It Right; Wish Mandatory Jail Time for Wrongdoers

Shareholders and board members should prepare for record turnover among Chief Financial Officers (CFOs) in 2007, according to a new survey from executive services firm Tatum, LLC. Data from the survey suggests that compliance headaches such as Sarbanes-Oxley requirements and unrealistic demands from board members and CEOs will drive more than 2,300 CFOs from their positions in 2007.

We are approaching an inflection point in the office of the CFO, and corporate America may soon find that creating shareholder value is impossible with what is quickly becoming an itinerant CFO,” said Richard D’Amaro, Tatum Chairman and CEO. “Many CFOs are fired or resign not because they weren’t a good match for the company when they were hired 20 months ago, but rather because the business has evolved so quickly that their capacity and capabilities are no longer an ideal match for the company.”

A record 2,302 CFOs left their positions in 2006, according to independent research firm Liberum Research. A survey of more than 150 Tatum partners in the firm’s Executive Practice last month indicates that 93 percent believe CFO turnover in 2007 will be as high or higher than 2006. Only seven percent of the respondents expect to see fewer CFO departures in 2007.

Morningstar: New Survey Predicts 2007 Will Set Record for CFO Turnover

Rep. Scott Garrett, R-N.J., unveiled legislation Wednesday to revise a 2002 law intended to clean up U.S. corporate accounting, which he says has had unintended consequences and may be driving some U.S. firms overseas.

Garrett’s bill seeks to reduce companies’ costs of complying with the 2002 Sarbanes-Oxley Act while giving the White House and Congress more control over oversight of public-company accountants.

The bill would shake up the private oversight board that inspects and disciplines accountants, a centerpiece of the 2002 law which ended decades of self-regulation of accountants. Free-market groups are challenging the board as unconstitutional because its members are appointed by the Securities and Exchange Commission, rather than the President. Garrett’s bill calls for the five-member board to be appointed by the President and confirmed by the Senate. In addition, it proposes the board be paid like Cabinet members, earning about $ 175,000 annually, a big cut from 2006 annual salaries of $500,000 for board members and $615,000 for the oversight-board chairman.

Morningstar: NJ Lawmaker Seeks To Revise Sarbanes-Oxley Act