Ex-CEO weighs in on Sarbox and financial statements

T.J. Rodgers, the former CEO of Cypress Semiconductor, has authored a paper for the Cato Institute that argues that since Sarbanes-Oxley became law, financial statements have devolved to the point that even CEOs can no longer understand them. That colorful rhetoric binds his many criticisms, but it's really less a criticism of Sarbanes-Oxley and more a criticism of FASB. The paper runs through the GAAP treatment of intangibles, various revenue recognition rules, and rules for stock option expensing. And it is impassioned: "It deeply angers me that government lawyers and naive theoretical accountants have been allowed to impair the economic miracle that democratized the silicon chip, the personal computer, and the Internet." What is missing is an actual criticism of Sarbox. So it's a bit of a bait-and-switch, but a well-argued one.

For more:
- here's the paper

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