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Almost three-quarters of the chief financial officers in the US believe that Sarbanes-Oxley should be “repealed or reformed” as the costs of the 2002 compliance law have outweighed the benefits, according to a survey.

The findings underscore the scale of frustration over the costs associated with implementing “Sarbox”, even as regulators said that costs were expected to fall as new guidelines for the law were finalised.

In a survey of 484 chief financial officers by Duke University and CFO Magazine, almost 70 per cent said the costs of adhering to Sarbox requirements - principally its section 404 provisions on checking internal controls - “greatly outweigh its benefits”.

A total of 35 per cent said repeal or reform of the law was “badly needed”, although no distinction was made in the survey questions between repeal or reform.

Most business groups and US law makers believe the law does not need to be repealed, although a majority believe that reform of the way it is implemented is needed.

Such reform is already being carried out. The Securities and Exchange Commission has just provided executives with new guidance on Sarbox implementation.

The Australian: CFOs call for Sarbanes repeal

Teamwork counts, especially when it comes to committing crimes at a corporation.

In a new examination of 374 companies accused of securities fraud between 1997 and 2002, an average of seven people were implicated in each case, including CEOs, chief financial officers, chief operating officers, general counsels, board directors and auditors.

“Far from being a solitary act, securities fraud necessarily requires complicity,” said William Black of the Kansas City, Mo.-based Institute for Fraud Prevention, which sponsored the study.

The institute is a coalition of universities funded by the Association of Certified Fraud Examiners, the American Institute of Certified Public Accountants, accounting firm Grant Thornton LLP and D-Quest Inc., a risk-management firm.

The study examined companies accused of fraud in lawsuits or regulatory actions.

CEOs were implicated in nearly 90 percent of the cases examined. Next came CFOs, 78 percent. Then board directors, 40 percent; vice presidents, 36 percent; COOs, 20 percent; controllers, 19 percent; and general counsels, 7 percent.

Big accounting firms - including Arthur Andersen, KPMG, Deloitte & Touche, Ernst & Young and Price Waterhouse - were implicated in 18 percent of the cases, the study said. (Grant Thornton, which sponsored the study, is not mentioned, but it has had similar issues.)

The study said that in many cases, management ran the board instead of the other way around. Often, the board chairman and the CEO were one and the same.

Denver Post: Fraud too pervasive to roll back SarbOx