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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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Commissioner Atkins: 404-Friendly In France?
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 6/20/2006 5:30 AM
Well, maybe "friendly" is pushing it. Slightly less hostile might be more like it.

Long-time critic of Sarbanes-Oxley Section 404 Paul Atkins delivered a speech to the French Association Of Corporate Governance last Thursday via satellite. French-fluent readers of this blog can find his remarks at the SEC website through this link. In French. For the rest of us bumpkins who ne savons pas parler en français, the English link is here.

(And if you're curious as to how well those "translate" websites work, Monsieur Google provides this link so you can compare. Vaguely amusing.)

Commissioner Atkins rarely misses an opportunity to bash the PCAOB's Auditing Standard No. 2, and he didn't give it a bye this time, either. But what was surprising was his near-admission of the importance of SOX as a whole, as expressed in this excerpt:

"... I am confident that the Sarbanes-Oxley Act can offer considerable benefits to shareholders. The emphasis on good controls over financial reporting is laudable. Section 404 focuses on the integrity of financial information and seeks to give shareholders additional insight into the credibility of financial statements... Our job — as regulators — is to ensure that the law's goal of improving the reliability of corporate financial reports is achieved in a rational and realistic manner, and that definitions of terms such as "material weaknesses" actually have meaning..."

If only he would have stopped there. But at least it was refreshing to hear the commissioner's general optimism about the future moderation of SOX 404 and auditing procedures instead of calling for their abolition. Unless it was lost in the translation.
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