The Sarbanes-Oxley Act holds CEOs and CFOs personally responsible for any accounting inconsistencies. Is this a good thing or bad?
As a native Houstonian who has witnessed first hand the economic and social disaster that was Enron, I think this is a good idea. The CEO/CFO is the head of the company, and if they don’t know whats going on with their finances, then they should. Ignorance should not preclude them from prosecution.
I think it’s a great thing to hold the officers of a company accountable for the reports which potential investors use to valuate a company’s shares. Transparency in pricing is always a good thing. The big problem with SOX seems to be that it requires a lot of documentation, and some companies are going overboard in creating documentation. The documentation should ideally be exactly what’s need to show the information that is needed. In reality a lot of companies are spending a lot of time and money on documentation overkill.