Key Problems On The Sarbanes-Oxley Act And The Countermeasures Of Implementation

The Sarbanes-Oxley Act has been plagued by controversy from its release. The paper aims to demonstrate the pros and cons of the Sarbanes-Oxley Act, to seek ways on reducing compliance costs and to provide references for china.The research shows that the SOX makes tremendous contributions in improving internal control, improving the quality of financial reports and rebuilding investors' confidence in the capital markets. Meanwhile many companies complained the high costs of the corporation governance, legal affairs, consulting and auditing. Due to the rules, guidelines by SEC, PCAOB and the first year's experience, the cost of implementation reduced greatly. But controversy did not stop. The company fraud is becoming more and more prevalent after the introduction of the SOX; PCAOB may exist rent-seeking; the independent auditors may be adverse selection; the oversight functions of the SEC and the PCAOB may be cross-existence; the penalties is not quite reasonable which can not protect the investors' interests. In any case, related investigations revealed that from a long-term perspective, the benefits will exceed costs. Therefore, the crux of the issue is not the merits or demerits of the act, but how to reduce the costs of implementation. It has been proved that founding a leading group is the prerequisite; A top-down, risk-based approach is the key; Continuous monitoring through IT technology and self-assessment is auxiliary. In this regard, the CHINANETCOME was a successful example.Facing to the Sarbanes-Oxley Act, Chinese enterprises can choose to receive challenge, back to "A" shares or seek a springboard to other countries. In any case, Chinese enterprises should seize the opportunity to learn from the spirit of the SOX, and promote the continuous improvement of internal controls.