The Sarbanes-Oxley Act of 2002, enacted by the U.S. Congress and signed into law by President Bush, is arguably the most far-reaching legislation affecting financial services, corporations, accounting, auditing, financial reporting and professional services firms since the U.S. securities and exchange laws of the early 1930s.
Moreover, some analysts say, given the looming global presence of the U.S. financial markets, its provisions and the regulations that give it practical application will have a major impact worldwide.
But the sweeping provisions of the law are raising concerns in the business community. Bob Kampmeinert, chairman and CEO of Parker/Hunter Inc., wonders if it will cause business leaders to shy away from making bold business decisions or, at the very least, have a chilling effect on the entrepreneurial spirit.
“I get concerned that entrepreneurship and risk-taking is taking a hit,” says Kampmeinert. “Regulators are making people look over their shoulders.”
And while the law affects public companies more than private firms, the current tenor of public opinion and political pressure could bring more intrusion by the government into the activities of private businesses, as well.
“I predict that, if the pendulum keeps swinging, the government will find some avenue into somehow regulating the private companies,” says Kampmeinert.
