Subprime issues revitalizes Sarbanes-Oxley

Implications: The chances of loosening the knot of Sarbanes-Oxley will be diminished with the emergence of subprime problems. Will small companies still have a chance to fly under the radar of Sarbanes-Oxley?

Analysis: Although the sting of Enron still remains many have sought to soften the tight controls of Sarbanes-Oxley.  There have been significant attempts in the last few years to relax some of the far reaching requirements of Sarbanes-Oxley.  With the recent subprime debacle, however, few have raised this flag.  Many are of of the opinion that controls like Sarbanes-Oxley would have sent up flares that the value of subprime mortgage-backed securities may have been actually much lower than what appeared on their companies' books.  Others are of the strong opinion that even without Sarbanes-Oxley it was some what axiomatic what was really going on, people just chose to ignore it.  Importantly, while something like Sarbanes-Oxley was clearly closing the door after the horses were out for Enron it has had some positive results for other emerging financial instability.  The founders of Sarbanes-Oxley, Mike Oxley & Paul Sarbanes appear to see the subprime issue as potentially bigger than Enron & WorldCom.  http://www.soxfirst.com/50226711/subprimes_parallels_with_enron_and_worldcom_michael_oxley_and_paul_sarbanes.php   When the dust settles a little smaller companies will still likely be the first to get some relief from corporate governance.