Thank you for the opportunity to help you with your question!
In steps Sarbanes-Oxley, the 2002
legislation that was supposed to protect investors from fraud by requiring
companies to be more diligent in creating and maintaining internal controls and
by forcing public company auditors to work harder. Tangible benefits from the
legislation are elusive. People would like to think that the legislation has
forced companies to have better internal controls, and therefore fraud risks
are reduced. Yet there is no real evidence that fraud risk or actual fraud has
been reduced because of Sarbanes-Oxley.
Companies with dishonest or incompetent executives will have fraud problems no
matter what the legislation says.
Thirdly the bad management is also a key role
management will be bad management no matter what the regulations say. Good
management will be good in spite of regulations as well. Invest in companies in
which honesty is at the forefront of their business model and is demonstrated
each day as they conduct business.
Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 2nd, 2015
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