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U.S. accounting overseers voted Thursday to streamline rules for auditors’ assessments of corporate financial statements, in a move that supporters say will save time and simplify burdens imposed by the 2002 Sarbanes-Oxley Act.

By unanimous vote, the five members of the Public Company Accounting Oversight Board approved a new standard directing accounting companies to focus their audits of internal financial controls on the most important risks.

Under Section 404 of the Sarbanes-Oxley Act, public companies are required to test and report their procedures for catching financial misstatements and fraud. The law was approved in the wake of accounting scandals that brought down companies like Enron and WorldCom.

But Section 404 of the act came in for heavy criticism from companies who said it cost large amounts of time and money by requiring extensive and sometimes unnecessary checks on financial reporting. It’s also been the cause of hang- wringing among some lawmakers and experts who claim it’s partly responsible for making U.S. capital markets less attractive to foreign companies, who fear the heavy compliance burden of the law.

Nasdaq: UPDATE: Accounting Board Streamlines Sarbanes-Oxley Rules

More companies are going private to avoid headaches of stricter governance rules and quarterly reviews by Wall Street

After 45 years in accounting for public companies, Sonny Durham is relieved he now works for a private concern.

Durham, former chief financial officer of Sunair Electronics, put together the transaction that took private the once publicly held radio communications business with headquarters in Fort Lauderdale. “I was personally glad for the opportunity to get out of the public arena. For a small business, it was becoming very demanding,” he said.

The Sarbanes-Oxley Act, the post-Enron law that placed new auditing and governance requirements on companies, has been blamed for many departures from the public market. At Sunair, for example, a tightening budget made it more difficult to add the staff needed to comply with federal reporting requirements, said Durham, who is part of the management team that took the business private.

Sun-Sentinel: A timely exit for many publicly held companies

America’s Most Trustworthy Companies

Alexander the Great is reputed to have said, “Upon the conduct of each depends the fate of all.”

More than two millennia on, the words of the Macedonian king echo true in the boardrooms of America, where the tainted winds of option backdating, insider trading and questionable pension accounting blow fitfully–along with the occasional gust still from the Enron-era corporate scandals.

Trust in free-market capitalism requires that shareholders and other stakeholders in the system have confidence in the probity of companies. Hence accounting standards and governance rules, and the regulators’ requirement that they be transparent.

Forbes: The Good Bookkeepers

Treasury Secretary Henry Paulson said Tuesday a balance must be struck between ensuring the competitiveness of financial markets and protecting investors.

Paulson addressed a gathering of top business leaders and former government officials. The conference followed months of campaigning by American business for an easing of laws and regulations established after the Enron debacle.

Paulson said the laws and regulations have been, ‘’extensive and significant, so it is quite naturally taking time for companies to understand, process and implement the new rules and requirements.'’

However, he said, ‘’the principles behind them have been positive, as have many of the results.'’

Panelists included billionaire investor Warren Buffett, General Electric Co. Chairman Jeffrey Immelt, brokerage founder and CEO Charles Schwab, former Federal Reserve Chairman Alan Greenspan and New York Mayor Michael Bloomberg. Paulson and Christopher Cox, the chairman of the Securities and Exchange Commission, are serving as moderators.

NYT: Paulson Addresses Top Business Leaders

Political sentiment runs in predictable cycles. In the midst of the stock-market bubble, no one cared about regulation and oversight. Everyone was making too much money to bother.

Then the money machine stopped, companies such as Enron and WorldCom blew up with their spectacular accounting frauds, and everyone was screaming for blood. A few perp walks and one big legislative package later, we entered the Sarbanes-Oxley era.

The avalanche of multibillion-dollar corporate implosions stopped. Many companies are still sorting out the impact of realistic options expensing going back several years, but the shakeout from that exercise is almost over.

What are we left with? A much fairer playing field for the individual investor. Between Sarbanes-Oxley shoring up the integrity of company accounts, and Regulation Fair Disclosure (better known as Reg FD) limiting leaks of inside information, the market is a better place to invest in than it was in summer 2000, by far.

Motley Fool: I love Sarbanes-Oxley

Last time the public was tuned in, the Justice Department was vigorously prosecuting corporate giants such as Enron for massive frauds committed during the waning days of the stock bubble. Assisted by the Sarbanes-Oxley Act, government lawyers were racking up victories in the battle against white-collar crime. One recent highlight was the October sentencing of former Enron chief executive Jeffrey Skilling to 24 years in prison.

Now that the public’s attention has shifted to matters such as Iraq, however, corporate America has launched a counterattack. Its goal is to derail the Justice Department’s efforts to maintain a heightened level of white-collar criminal enforcement. Its success thus far starkly illustrates how power and money influence our criminal justice system.

washingtonposts.com: Corporate America Fights Back

From University News Services:

While corporate executives say their businesses are groaning under the weight of complying with Sarbanes-Oxley regulations, two University of Iowa business professors have found that most investors cheered the law during its early days.

Research by Sonja Rego and Haidan Li in the Tippie College of Business shows that stock market values increased significantly as a result of the reforms imposed by the Sarbanes-Oxley Act in July 2002. The two authors said that while the law may impose burdens on businesses, it has restored investor confidence in a market that was battered by a six-month long string of corporate scandals from Enron to WorldCom.

Their research also found that market values increased even more significantly for those corporations that were thought to have been the most aggressive in managing — and occasionally manipulating — their earnings in order to artificially inflate their stock price.

press-citizen: UI researches show gains from Sarbanes-Oxley

Auditors are doing a far better job of detecting corporate fraud since the 2002 Sarbanes-Oxley Act, while whistle-blowing by employees has declined, a new academic study concludes.

The U.S. law, adopted amid corporate accounting scandals at firms such as Enron Corp., spurred a four-fold increase in auditors uncovering fraud, according to the report. The study of 230 big corporate frauds between 1996 and 2004 found auditors detected nearly 17% of cases after Enron, up from 9.6% in the pre-Enron period.

Among other things, the 2002 law requires an annual assessment of corporate internal financial-reporting controls, and researchers say the yearly effort may help auditors detect fraudulent activity at client firms.

Morningstar: Study: Auditors Now More Likely To Spot Corporate Fraud

In response to Enron, WorldCom, Tyco, Peregrine and some of the biggest accounting firms playing a shell games with the corporate books, Congress enacted The Sarbanes-Oxley Act in 2002.

Today Siemens, based in Munich, Germany is being eyed for over 500 million dollars worth of bribes to public officials in Asia, Eastern Europe and Africa and other questionable payments by the company which occurred without top managements knowledge, according to the International Herald Tribune.

In Germany it is a crime for corporate officials to bribe a public official. It is a crime in most modern countries to report embellished earnings or hide essential facts to their investors. Essentially, Sarbanes-Oxley and every other codification of bad conduct cannot prevent anyone hell bent on greed from devising a plan of deception.

American Chronicle: Sarbanes-Oxley Can’t Beat Culture of Good Old Fashion Greed

It’s all Enron’s fault that Apple will apparently charge $5 to make a recent Mac’s AirPort Express Wi-Fi adaptor connect to other 802.11n-enabled devices. The fee arises from accounting rules imposed by the Sarbanes-Oxley Act put in place after collapse of the energy company in 2001.

According to Apple insiders cited by iPod site iLounge, if Apple gives the update away for free, it violates Sarbanes-Oxley.

RegHardware: Apple’s alleged 802.11n enabler fee: blame Enron etc.