The SOX Conundrum

I found this short piece on corporate and securities fraud to be rather interesting and as a fraud professional and academic, it brings up some pressing questions in my mind.

If SOX, which has been described as one of the toughest pieces of corporate legislation ever enacted, is having such impact in preventing fraud in publicly traded companies, why then:

1) Did we need Dodd-Frank?

2) Why does the FBI have “110 Agents examining corporate fraud?”

3) Why does the FBI have “233 Agents looking at securities fraud?”

4) Why does the FBI have more than 2,300 open corporate and securities fraud investigations open at the end of 2010?”

While we’ll never eliminate fraud altogether, if SOX was as effective as advertised, shouldn’t these numbers be decreasing?!  Perhaps it’s time for a SOX overhaul to bring it in line with today’s times? Draw your own conclusions!