Do you agree or disagree? Why?

The Sarbanes-Oxley Act of 2002 was established to police firm's accounting practices through audits and standardization of the accounting and audit practices in order to prevent fraud. Sec 404 requires that management with a business must maintain internal control mechanisms and test the efficacy of those mechanisms for financial reporting. It also requires that auditors attest and report on the findings of an audit.

These extra steps became costly for businesses. It helped put a stop to fraud committed by some firms, but also created an extra cost that smaller firms struggle. Greg Fuller wrote a short article 13 years ago with this as his observation of the SOX Act. He states that this became a penalty for these smaller and honest businesses. He also asserts that while the SOX Act has had an affect, it doesn't catch all fraud and that there are still many companies committing fraud and just not getting caught. Personally, this wouldn't surprise me in the slightest.

https://www.congress.gov/bill/107th-congress/house-bill/3763

https://ezinearticles.com/?The-Effectiveness-of-Sarbanes-Oxley-on-Fraud-Prevention&id=2081849