At a time when we need risk-takers to start companies and create jobs, we need to do everything we can to remove unnecessarily burdensome regulations that dampen entrepreneurship. A high-impact, low-cost reform would be to make some of the more onerous requirements of the Sarbanes-Oxley Act of 2002 optional. This would permit companies whose shareholders don’t feel that the benefits of “SOX” requirements outweigh compliance costs to access public capital more quickly and less expensively. This kind of access to capital is critical for the survival of young
firms, which have accounted for
all net job growth in the United States in the past two decades.
The logic behind this recommendation, laid out cogently in the Kauffman Foundation’s State of Entrepreneurship Address, is that SOX was enacted in the aftermath of corporate financial reporting scandals, after all, to protect shareholders. So why not allow shareholders to vote on whether their companies will fulfill certain SOX requirements?
To read the full, original article click on this link: Policy Dialogue on Entrepreneurship | Reevaluating Sarbanes-Oxley
Author: Jonathan Ortmans
