Australia’s CLERP-9 ............................................................................
The Corporate Law Economic Reform Program (CLERP) Law of 2004 aims to
strengthen Australia’s financial reporting framework. The details of CLERP
are less prescriptive than SOX: They contain reforms to the existing corpo-
rate governance provisions, including changes to financial reporting and
executive remuneration. Provisions are in place to ensure auditor and analyst
independence.
Canada’s C-11 ......................................................................................
Brought into law in 2005, C-11 has established a procedure for the disclosure
of wrongdoings in the public sector and ensures protection for the person
who discloses these. (Protecting the whistleblower is also a big part of SOX.)
Basel II..................................................................................................
Basel II has created an international standard for banking that regulators can
use when making regulations on how much capital banks must have to offset
potential risk. The more risk a bank has, the more capital it should have in
place to ensure that it stays solvent. This requirement proactively provides a
big safety net should things go horribly wrong.
Sorting Out the Benefits of SOX .................................................................
SOX is no longer in its infancy. The law has begun to mature and reveal its
promise. According to the article “The Unexpected Benefits of Sarbanes-
Oxley” by Stephen Wagner and Lee Dittmar, published in the Harvard
Business Review, publicly held companies who have been through the SOX
mill and come out the other end intact are seeing unexpected benefits. Some
of these include
A better control environment, where executives set the tone for ethical
behavior and employees follow suit
Facing the mountain of documentation required by SOX means making
improvements to procedures and employees’ understanding of these
procedures
The Audit Committee takes its role seriously
Chapter 4: How Sarbanes and Oxley Changed Our Lives 103
