Is Sarbox unconstitutional?

I thought you might be interested in the thoughts of Sanjay Anand, chairperson of the GRC Group (www.grcg.com), as to what could happen if SOX was ever deemed unconstitutional:

“I am not going to speculate on whether Sarbanes-Oxley will be ‘struck down’ or not, since that is anyone's guess at this point,” Mr. Anand says. “However, I will discuss what could happen should the Supreme Court conclude it is unconstitutional.”

1. Since SOX is an "all-or-nothing" regulation, deeming any portion (in particular Section I that deals with PCAOB) of it as unconstitutional immediately negates the entire legislation.

2. There is no overwhelming precedent that has been set for the Supreme Court to either deem it unconstitutional or to understand what the repercussions of deeming it unconstitutional would be.

3. Should it (SOX) be deemed unconstitutional, I still feel that SOX will not go away. In other words, there is a lot of pro-SOX momentum in the marketplace that companies will continue to push it as best-practice.

4. SOX will become a differentiator in the marketplace (just like ISO). Big companies will continue to adopt SOX as a way to differentiate themselves and to take advantage of industry best-practices.

5. Some small companies will take to SOX, but many will ignore it saying it is too expensive. But they may take on some elements of it.

6. New legislation will come into being that will be more similar to J-SOX, C-SOX etc. and will be a "watered-down" version of current US-SOX. The new legislation will apply only to large publicly-held companies and non-profits.

7. The new PCAOB will be a part of the SEC, and will not have as many powers over the audit firms as the current PCAOB. The new PCAOB will likely not be called PCAOB due to the bad image associated with the current PCAOB.

8. IT will continue to operate as it currently does (with maybe a few less curse-words towards SOX). COBIT, ITIL, ISO etc. will go back to being best-in-class industry-standards rather than SOX suck-ups.

9. We may end up with a bad sequel (SOX II) to the first movie (SOX). The sequel is never as good as the original as we all know. Maybe this will start to feel a bit like Groundhog Day (SOX all over again).

10. There is nothing wrong with SOX, per se. The problem was with the guidance and standards. Maybe this time the new PCAOB (and the auditors) will get it right.