Passage of SOX

The Sarbanes–Oxley Act (“SOX”) was approved by the United States House of Representations by a vote of 421 in favor, 3 opposed, and 8 abstaining. The United States Senate passed by bill nearly unanimously, 99 voting in favor of the act with 1 senator abstaining. Then President George W. Bush signed SOX into law, stating that the Act included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt."

Controversy of SOX

While the Sarbanes–Oxley Act (“SOX”) garnered nearly unanimous support in the United States Congress, SOX has proved to be a controversial. The primary debate regarding SOX relates to its perceived benefits compared to its significant costs. Supporters contend the legislation is a necessary component of overhauling a broken accounting system and restoring investor confidence in public companies. Proponents also claim SOX has significantly improved the confidence that all companies are complying with the same set of standards.

Opponents claim SOX’s cost outweigh its benefits, including that the Act has reduced the United States’ competitive edge in attracting international companies to base their corporate headquarters in America. Opponents state SOX has created a needlessly complex regulatory environment into U.S. financial markets.