Sarbanes-Oxley, A Bad Thing?{5}

by Penny P
The author talks about the negative impact that the Sarbanes-Oxley Act of 2002 made on small firms. Dvorak starts out using Yahoo! as an example to explain why he believes “Sarbanes-Oxley sucks” (Dvorak).  He believes that if SOX became a law during the time that Yahoo! went public, Yahoo! would never have done so. Dvorak believes that Sarbanes-Oxley is a “ridiculous burden on smaller firms” (Dvorak).  He goes on to describe that these small companies can only do their best “when the original visionaries are…at the helm” (Dvorak). As soon as a bigger company eats the smaller company, that visionary may not be able to continue the work he/she had planned. Dvorak applauds Michael Dell because he is a visionary who still runs Dell.

Towards the end, Dvorak summarizes that many companies can’t “go public and get working capital” without a bigger company to buy and absorb them. Sometimes the position that the visionaries find themselves in is for the big companies to keep them on “as a slave” (Dvorak). His main point in this article is that SOX makes it difficult for “small innovative companies to float shares and get public funding” (Dvorak). He believes that repealing the Sarbanes-Oxley act will fix the problems.

I thought this article was interesting because I didn’t think that small companies would be affected like this. When I heard about the Sarbanes-Oxley Act of 2002, I thought it was a way to prevent scandals from occurring, like what had happened to Enron and several other companies. It seemed like a good thing to be able to ensure that big companies are not doing things that they are not supposed to do. But I guess I never thought about what would happen for the small companies.



Dvorak, J. (2011, September 13). PC Mag. Retrieved from,2817,2392925,00.asp.