Fraud Examiners Say SOX it to Fraud

Oversight Systems surveyed 208 fraud examiners and found that they believe that Sarbanes-Oxley has been effective in identifying fraud with almost two-thirds saying that requirements of SOX make it at least somewhat easier to catch fraud. Examiners surveyed were far less confident that SOX would change corporate culture and make management more honest; over 70% believed that interest in corporate integrity and fraud prevention either had already started to fade or would fade in the next five years. Strong discouragement of fraud from top management and visible fraud prosecution were seen as the most effective fraud deterrents, with internal controls and technological monitoring also getting some support. The three greatest fraud concerns were viewed as being conflicts of interest, fraudulent financial reports and billing schemes.

Given the criticism that SOX has taken from the financial press regarding cost and time required, results like this are needful for SOX to have a long-term future. The limited expectations of human nature are reasonable; Hubert Humphrey said long ago that you can't legislate morality.