Google is over the top, again!

SideWiki, speaking of which, is a democratic tool. It gives people the freedom to comment on certain web pages. Each time a user comments, follow-up users can read helpful information about the target page.
SideWiki will crush all the Con Mans and their fake "heavenly product" but only if contributed honestly and properly.

I am S A Rahman and I salute Google for SideWiki. Yet again you are over the top Google! Keep these gadgets coming.

in reference to: Google Sidewiki (view on Google Sidewiki)

My eBook: Guide Line to Write Ads More Effectively

What is advertising?
Is it something to be regarded as a work of beauty or art? Is it clever
slogans or amusing prose? Is it workmanship to be judged for an
award or recognition?

It's none of the above.

Advertising is salesmanship multiplied.
Nothing more.

Blogging Ca$h: Increase Blog Traffic

1) Comment on Blogs
Look for large traffic Blogs in your niche, visit them and leave your comments on their blogs posts. You may use blog search engine like, and to find blogs in your niche.

2) Submit Articles
Write articles that are related to your blog and submit them to popular article directories such as,,, and Quality articles may drive you a lot of free targeted traffic.

Bloggin: Source of Ca$h

1) Cost-Per-Click (CPC) Advertising Programs
CPC advertising programs are the best money making programs for most of the bloggers. They are suitable to all kind of blogs with family-friendly content regardless of their traffic level and age. CPC programs work well on blog because they display contextual ads that are highly relevant to blogs content and bloggers will earn anywhere between 10 cents to 50 cents for each contextual ads click by their visitors. With proper CPC ads optimization and consistent amount of traffic, a blogger can earn a steady amount of money displaying CPC ads on his/her blog. Google AdSense is no doubt, the undisputed king of CPC advertising programs and Yahoo Publisher Network is the closest alternative of AdSense.

2) Cost-Per-Action (CPA) Advertising Programs
CPA programs is quite similar to CPC programs except CPA programs don't pay bloggers for each click on the CPA ads hosted by bloggers. The blogger only makes money when the visitor takes an action on the CPA advertiser website. The action can be a sign up, making a purchase, generating a lead, downloading a product and more. CPA networks pay a lot more than CPC programs, for a visitor sent by the blogger from his/her blog to a CPA advertiser website and the visitor taken an action on the advertiser site, the blogger can earn few dollar to fifty dollar depend on the niche. But CPA ads tend to work well on large traffic blogs only., Commission Junction and are some of the largest CPA networks.

3) Promote Affiliate Programs
Marketing affiliate programs is very common nowadays. You sign up with affiliate program of an online company, then decide whether to use the company's text link or banner ads on your blog to promote the company's products or services and earn affiliate commission when a visitor make a purchase through your affiliate link. Affiliate programs can be promoted without a website and blog too.

4) Pay Per Post Programs
Pay per post programs started last year. The programs pay bloggers to write a blog post about a sponsor's website. The paid blog post can be a review or an introduction on the advertiser's website, products or services. The blogger will be paid a least $5 for each sponsor post. Blogs that have massive traffic, high Google PR and large number of subscribers can charge a few hundred dollar for just writing one sponsor post. Here's are the two most popular Pay per post networks that offer this type of earning opportunities:

The downside of pay per post is that writing too many sponsor posts that are not relevant to your blog content can seriously affect your traffic.

5) Sell Text Link Ads
Selling text links on your blog can be a great source of additional online revenue. It is not difficult to get started, just go to to sign up an account, then decide which part of your pages you want to display paid text links, set your price and you are ready to take order. will handle all the promotional works. Another company that offers the similar services as is

6) Hosting Web Poll
Vizu Answer offers a pretty new way to monetize your blog's and website's traffic. The pays the publishers on a cost-per-thousand impression (CPM) basis for hosting targeted web poll. The money a blogger can earn from hosting poll is depending on the page views. The more page views, the higher the earning.

Freelancing Business: Make the most from

Make the Most from Freelancing by Effectively Promoting Your Online Freelance Business Services
For a freelancer, having a professional presence in their area is of prime importance, be it the internet or offline. The latest equipment and the best technology will not be of any use without that much required 'presence'. This presence is what builds credibility and is acquired by marketing your services in an appropriate and effective manner.
Marketing your freelancing services begins with marketing yourself. You would understand what I am trying to say, if you look at yourself as a 'Brand' that requires a very high level of marketing. Just as companies have reputation, each person you meet offline or interact with online, forms an opinion about you and this reputation (positive of course) is what creates a brand.
There are several ways to promote your services on the internet, through email, websites, articles, e-books, and several others.

Sponsors: Article Maker Pro

Sending e-mails is a great way to let people know about yourself and your services. Send emails to people who you are connected with in some way, such as organizations that you belong to or various groups that you are a member of, or to people that have requested you to. Create signature files with details of your name, address, telephone and links to your websites (if you have a website). A small description of what you do and contact information should be sufficient to peak the interest of people.
You can start sending newsletters. Never send too many and watch the pace at which your newsletters reach people. There should be a decent gap between each. Make readers aware of your services through these newsletters. This may require a little bit of knowledge. Read all about newsletters and how they are done, as these could really be a great help to a freelancer.
Now, here is one of free ways of marketing freelancing services. You can start writing articles and send them to website owners, relating to the topic of their website and have a bio box at the bottom of the article, giving details about your services and this would work better if you have your own website, where they can link to.
When marketing offline, you can use newspapers, magazines, pamphlets, press conferences, and advertisements, to market your services. Giving your telephone number as a point of contact is a must. Then finally, if someone calls showing interest in your services, it becomes inevitable for you to meet them, unlike online when all your services can be marketed without actually coming face-to-face with your client.

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For your offline freelance marketing, remember that you may be asked to submit documentation in relation to your services. Do not be intimidated, although initially when you are new, it may happen, do not show it ever. Be professional to the core.
Do your homework before meeting a prospective client. Get as much information about them as you possibly can. Proper preparation and presentation is the key. Write down the information about what you want the client to know about you and why they should use your services. What is different about you? Do you think just telling them that you are going to do a great job is going to help? NO. Ask questions about their needs and get them to ask you the right questions. Definitely takes some smartness. Use the word 'help', whether online or offline. Make them feel that you are willing to help them and once they understand that, then get the ball rolling.
Whatever method you choose to use, the first and foremost marketing technique that will land you projects is to be able to differentiate yourself from competition. Your clients should begin to see you as their preferred choice. Remember, it's never about what you do, it's always about what you do different that sets you apart from your competition. Work on writing the greatest copy so that your message gets into the minds of your prospective clients.
If you do not taste success in the beginning, persist, and persistence pays off. If you give up, you would never know what could have been. Let your services speak of you, let them bring forth your personality. Aping will not get you anywhere and clients cannot associate you with a particular style.
Focus remains the one most crucial aspect that will take you to great heights in your freelancing career. You have to market in such a way that your clients understand they are going to save money and get quality by hiring your services.
Important aspects of marketing are public relations, direct mail, newsletters, discounts, sponsorship, word of mouth and other tactics of communication. Have a vision and a goal and center your marketing around that. Do not go in a hundred different directions and confusing yourself as well as others.
Once you ensure you have a proper plan on what you are going to be marketing and how you are going about it, and what benefits you are showing your prospective clients, it will be extremely effortless to sell yourself and in turn your services, because people will understand your message loud and clear.
Finally, remember that your reputation is your best marketing manager. Good reputation stands the test of time. You may come across erratic and unreasonable clients, but it is up to you to maintain your calm and take it in your stride. Establish trust in your prospect's mind and you are halfway inside the door. The more people trust you, the more popular you become and offers will come to you knocking at your door.

Freelancing is all about attracting more business with very less effort.

Tips for Avoiding Your AdSense Account Getting Banned by Google

I have seen quite a lot of AdSense publishers posted in different forums stating that their AdSense accounts were banned by Google due to fraudulent clicks. Most of these people claim that they are innocent and have never clicked on their on AdSense ads. So they have no idea why click fraud can occur on their AdSense accounts. The truth is click fraud can happen in several ways and not necessarily caused by the AdSense publisher himself/herself who accidentally clicked on his/her own AdSense.

Below are some of the tips to protect your AdSense account:

5 Tips to Boost Your Adsense Revenue

Google AdSense program has made it easier for webmasters to make money through a website. Webmasters who run an AdSense campaign will display Google's contextual Ads relevant to the content of their sites and thus encouraging visitors to click the ads and earn money for each ad click.

However you will earn very little AdSense revenue if you don't know how to optimize your AdSense ads on your website. Here are some tips to increase your AdSense earning:

1. Focus on one Adsense ad format. The Large Rectangle (336X280) ad format seems to work better than other ad formats because this format tends to result in higher click through rates (CTR). Another reason is that the ads will look like normal web links that visitors use to click on them. It doesn't matter whether the visitors know that they are clicking AdSense ads or not, as long as there are clicking, you earn AdSense commission.

2. Create a custom palette for your ads. Select a color that matches your website's background. If your site's background is white both, the color of ad border and background should set to be white too. Also the color of the ad title should be similar to coloe of the links in your website. This is to make your AdSense ads look like it is part of the web pages. Again, this will boost AdSense CTR.

3. Don't place your AdSense ads at the bottom of your webpages because it is proven to be less effective. Displaying your AdSense ads at the bottom is like hiding your AdSense and thus leads to low CTR and AdSense revenue. Try to put them in the place where people can see them quickly. You will be amazed how the difference between AdSense locations can make when you see your earnings.

4. Try to place your AdSense ads near rich content as visitors main focus usually are your content. There are several ways to insert AdSense ads into your content and one of the ways is place your AdSense just after the end of your content.

5. Try to automate the insertion of your AdSense code into the webpages using SSI (or server side included). Ask your web administrator if your server supports SSI or not. How do you do it? Just save your AdSense code in a text file, name it as "AdSense text", and upload it to the root directory of the web server. Then use SSI, call the code on other pages. This tip is a time saver especially for those who are using automatic page generators to generate pages on their website.

These are some of the tips that have worked well for some who want to generate hundreds and even thousands on their websites. There are other ways to optimize your AdSense that produce high CTR also. You can learn more tricks by reading in AdSense and webmaster forums.

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4 Steps to Creating A Website Specifically to Earn AdSense Revenue

Building a website to earn Google AdSense advertising revenue has become a popular way to make extra money online nowadays. It is easier to earn AdSense income versus generating sales by selling products or services online. However it does involve works, time and money before you start earning from Adsense program. Below are the steps to creating a content website for earning AdSense revenue.

Step 1
Decide the content of your website. You can write a topic or subject related to your interest, hobbies or experience. You can also provide educational information and advice on your website if you are expert at something.

Step 2
Use a website builder to create your website. One of the easy-to-use website builders that can help you build a website is Bluevoda website builder. Bluevoda site builder allows users to build a website without technical knowledge. You don't need to build your site from scratch. The trick is to use a free professional template provided by the site builder and then start adding your text and links to your website. You can add some graphics and pictures to make your site look nicer. After completing your website project, your next step is register a domain name and sign up for a hosting account to publish your website on the Internet.

Step 3
Join Google AdSense program. It will usually take several days for Google AdSense team to review and approve your site. If Google accepts your application. You can start learning how to generate AdSense code for inserting to your website to generate Adsense revenue. If your site rejected by Google, don't get upset easily. Google will let you know the reasons of the rejection. You can fix the problems and reapply again.

Step 4
You need to drive targeted Visitors/Traffic to your website to generate Adsense revenue. The higher your website's traffic the greater your Adsense earning will be. Below are some of the ways that can help you drive some traffic to your website in short period of time.

  • Use Per-per-click (PPC) advertising. The two most popular PPC search engines are Google and Yahoo. Google and Yahoo can deliver instant traffic to your website but it is costly to advertise on Google and Yahoo. There are other alternatives like and which are cheaper to advertise with.
  • Introduce your site to your family and friends.
  • Write several articles with a link to your website on the resource box and submit them to article directories. You can find a list of article directories by going to Google and entering the search term 'article directory'.
  • Post messages on community forums with a link to your site on the signature of each message posted.

S. A. Rahman Bukhari

Chat Google Talk: abcent
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According to ME: AutoBlogger Bot

The reason of my blogging is that I love to write. I like to capture all the words coming across my mind onto the paper, I was maintaining my diary-was a student back then. Now, I am busy with my run to earn marital life with a house sitter wife and kids at home. But still, I would want to write my words, my thoughts, my ideas and emotions myself, cannot allow any automated script to do this for me without knowing; what I be thinking? And I would maintain my blog just because its a passion to me, neither for fame nor for blog fill.

What is a bot?

A bot, derived from robot, just a virtual one not a mechanized. A code written by a computer programmer, to be more precise.

What is an auto-blogger bot?

Search results for auto blogger say;
Yet another Autoblogger (YAAB) plugin for wordpress can create automated blog posts using rss feeds like any other similar plugin, but in addition, Yaab can escape content duplication using auto carnival feature using which you can run a fully carnival in your site on a regular basis (say, every sunday).
I can only laugh at this specification, this is why I don't blog on at should serioiusly consider the elimination of these autoblogger bots.

This Auto Blog Generator is the only Blog Builder and management system in the world that creates, manages, posts to, and supplies targeted content to your blog.
Excessive lameness, if this bot is going to fill up your blog categories ladies and gentlemen, who is going to read those post? Even if this bot changes the words, it cannot change the way one writes.

Autoblogger will read recent bookmarks marked with a specified tag and create a link to them with the page title, as well as quote a random (filtered, given simple heuristics) excerpt of the text. It's better used for long texts -- so it's more likely to pick up significant excerpts. Autoblogger can be used to create an autoblog -- a page summarizing your recent reading -- or as a blog sidebar plug-in.
Including whatever they say, it seems a good reading tool but again, there are so many of the RSS readers already without illicit names. In fact, this is not a reader for one's ease, this is a post theif!
Most of the coders make post stealing scripts just for, why? Because, look at this;

With any PHP-based content management system (like Wordpress), add the following code to your sidebar template:

These dudes are mother of all lamers,

Free Auto Blogger manages many commercial Blogs all from your desktop with auto posting content from rss and xml feeds that you choose. Add your own custom post to "salt and pepper" throughout your blog as advertisement. more....
According to me, either people those who use these automated codes to make their blogs big and money making should quit blogging or come up with their own dedicated posts for that matter.

According to ME:

What is Twitter?

What is Twitter?

Twitter is a service for porn sites, make money scams, and freelance porn stars to mass advertise and keep spamming through the exchange of links, frequently abused 'tiny-url' to one simple question: What are you doing here? (If you are not a porn star/ porn watcher/ make-money scam scum)

Get Annoyed—Now!



“Senior Business Administration Professional with 12 years experience of implementing leading-edge policies”

  • Strong and effective organizational and communication skills.
  • Versatile and learns new tasks/skills quickly.
  • Highly motivated with experience in banking.
  • First-class analytical, design and problem solving skills.
  • Dedicated to maintaining high quality standards.
  • Experienced in day-to-day management of organization and staff with commercial accountability for planning, organizing and directing all technical services.
  • Proven leadership skills involving managing, developing and motivating teams to achieve their objectives.
  • Good team player with excellent interpersonal skills.
  • Able to work on own initiative and as part of a team.


  • Experience with company accounts and bookkeeping using MRP/ERP. Results-driven, logical and methodical approach to achieving tasks and objectives.
  • Excellent Microsoft Office and Microsoft Project experience.
  • Strong planning, organizing and monitoring abilities. Uses initiative to meet and resolve challenges.
  • Strong and effective organizational and communication skills.
  • Forward-thinking HR manager with proven ability to take a leadership role and influence management's strategic path.
  • Experience in gauging and filling the employment needs of the company and bringing on board new skill sets leading to business growth.
  • Entrepreneurial and pro-active - strong drive and keen business mind. Ability to identify and develop opportunities.
  • Proven experience with design and production both for terry towel and cotton cloth.
  • Proven ability to manage and improve sales turnover in a short period of time. Outstanding skills in assessing what is needed, recommending sensible solutions, and effectively motivating staff to implement them through teamwork.


As Accounts Manager,
  • Implemented new accounting and bill payment system.
  • Increased company cash flow by carefully managing billings and payments, which enabled company to buy and sell more stock each month, thus increasing sales.
  • Designed forms to expedite billing system and improved work productivity 50%.

As General Manager,
  • Estimated unit costs, performed take-offs and obtained production orders working directly with the General Contractors.
  • Supervised crews of up to 55 people including weaving masters, job-men, weavers, office staff and general laborer personnel. Provided improved work environment for 60 People company in busy administration practice. Calmed labor's fears, created comfortable atmosphere, and acted as emotional support.
  • Handled full range of administrative secretarial duties-scheduling, work hours, attendance, payroll etc.
  • Eliminated labor unionism and other socio-political threats like labor strikes, vandalism, extortion etc.

As Production Manager,

  • Established production standards of efficiency, ensuring minimum waste and maximum utilization of resources (machines, raw material and manpower).
  • Successfully supervised production processes to ensure implementation of company standards and ISO-9000.
  • Coordinated the handling, storage, and flow of finished product through the warehouse.
  • Received daily production and shipping plan; adjusted storage space so that excess can be stored in warehouse.


2004 - 2009: Syed Brothers
Position: General Manager

As General Manager, I managed & supervised the entire business of all factories with the assistance of 4 associates, for 5 years (2004 ~ March, 2009). Summarizing general management is not an easy job but still, some of my major duties were;

  • Management of Accounts section, Production units, Processing factory, Administration block, Shipping company etc. by reading reports and visiting.
  • Orders arrangement of bathrobes, bathing sets, bar mops and other goods made of towel and cloth from local parties.
  • Cost-effective purchasing of cotton yarn, packing materials, office stationary, office machines, machines, hardware for machines etc. from various suppliers.
  • Dealing with over-head manufacturers for toll manufacture.
  • Making annual contracts of maintenance regarding power generators, heavy machines, office machines etc. with various contractors.
  • Meetings with various government departments such as excise and taxation, labor division, department of medium and small industries etc. and reporting to Director.
2000 - 2004: Syed Brothers
Position: Production Manager

As Production Manager, I managed & supervised the production routine of all factories with the assistance of 5 associates, for 4 years (2000 ~ 2004). Under this hectic management, some of my major duties were;

  • Tracking and control of daily production of terry cloth, towel, bathrobes, hand towels, bath towels, bar mops etc. on daily bases - and reporting to General Manager & Director on daily, week and bimonthly bases.
  • Maintaining the yarn stocks for weaving by sending purchase demands to General Manager for cotton yarn beforehand.
  • Maintaining the stock of packing material by sending purchase demands to General Manager for mercerized thread, plastic bags, cartons, adhesives etc beforehand.
  • Delivering yarn to weaving departments, terry cloth and towel to processing unit and deliveries to parties within time.

1997 - 2000: Syed Brothers
Position: Accounts & Finance Manager

As Accounts & Finance Manager, I managed & supervised the entire accounts department consisted of 3 associates, for 3 years (1997 ~ 2000). I was dealing with accounts and finance formalities, internal audit for income tax and general sales tax, payroll, bank accounts of factories, billing and invoicing, computerized bookkeeping, profit and loss analysis, assets tracking and reporting.


2000-2002: The University of Karachi
Qualification: M. Com (Business Administration and Commerce)

Secured 2nd division and specialized in;

Business Administration & Management
  • Application of Computer to Business
  • Business Communication
  • Business Economics
  • Business Mathematics
  • Business Research Methods
  • Business Policy
  • Business Law
  • International Business
  • Organizational Behavior
  • Statistical Inference

Accounting and Finance
  • Specialized Accounting System
  • Financial Accounting
  • Cost Accounting
  • International Banking
  • Managerial Accounting
  • Governmental Accounting
  • Taxation

  • Principle of Marketing
  • International Market
  • Improved Marketing
  • Marketing in Pakistan

1996-1998: The University of Karachi
Qualification: B.Com (Business Administration and Commerce)

Secured 2nd division and specialized in;
  • Business Applications
  • Business Communication
  • Business Law
  • Economics Analysis and Policy
  • Chartered Accountancy and Audit
  • Industries in Pakistan
  • Advanced Accounting and Finance
  • Principle of Banking


  • I am Honest, loyal & dedicated to my work.
  • I am punctual, hard working & never give-up.
  • I am fluent and confident, thus get the attention.
  • Practically talkative, efficient and capable of working under pressure.


  • Working knowledge of computing under Ms Windows’s environment.
  • Ms Office (Ms Word, Ms Excel, Ms Project, Ms Power Point)
  • Accounting (Quick Books, Peach Tree)
  • Administration (MRP, ERP)
  • Fluent in written and spoken English & Urdu.
  • Superb communication and interpersonal skills.
  • Vast applied and object oriented knowledge.

References available upon request.
Thanks a lot for reading,

Syed Abdul Rahman Bukhari

The failure of Operation Khanjar

58584 square kilometers and a population of more than 0.7 million, Helmand is one of the 34 provinces of Afghanistan. Pashtoons are the majority, but there are also larger minorities of Hazara and Tajik, who are primarily resident. Helmand is infamous for its war-loving and reckless youths and is the world's largest opium-producing region, responsible for 42% of the world's total production. Helmand and Pakistan are indissolubly linked. Helmand has 286 kilometers long southern border with the Baluchistan province.
On 2nd July, NATO started a military offensive to bloodshed the Muslim known as "Operation Khanjer". According to American media, this operation is the largest Marine offensive after Obama became the president. About 4,000 U.S Marines 800 British and 650 Afghan troops are involved in this operation, which is Obama's largest offensive against Taliban. Allied forces are well equipped with latest and deterrent armada including dozens of 'death from above' gunship helicopters and 'sending back to stone age' horrifying tanks which can turn valleys and hills into waste lands within minutes.
According to a report of New York Times, Operation Khanjer is very important military offensive after Vietnam because significant numbers of soldiers are participating in this operation. According to NATO Spokesman, the purpose of Operation Khanjer is to clear insurgents and to stabilize the peace for the success of presidential election on 20th August. America-pleasing Governor Helmand Gulab Mangal is claiming success for Operation Khanjer, while American Commander General Larry Nicholas said, regarding this operation, that we will stay, build and work toward transition of all security responsibilities to Afghan forces.
NATO Commander, Major General Mart Kroff told the media about the presence of 12000 to 18000 Taliban militant within the Helmand region, Allied forces will push them out to control Kandahar and southern Afghanistan. Taliban has commenced a full scale offensive on the other side. Experts of Defense and Warfare say in their assessments that Helmand is a bigger province where people have soft corner for Taliban. Taliban’s war strategy is the same as it was against Soviet Union; they go into cover by the dawn and concentrate on attack after the dusk, to teach Allied forces a lesson. Thus, the entire Western world is eyeing this operation. Remember, after conquering Kabul this is the first major offensive for NATO forces. Helmand and Kandahar in Afghanistan; are two regions considered to be Taliban stronghold and had been the most dangerous sectors for coalition forces, where they are having major losses.
In past, America assigned; British forces to Helmand while Canadian forces to Kandahar, Taliban had a flawless victory by defeating coalition forces in all regions-Including Operation mountain thrust, Operation silicone and Operation Herrick but, with all the pride and power they failed to succeed over Taliban. Taliban commander Mullah Dadullah got killed in Helmand, coalition forces celebrated over the death of Mullah Dadullah assuming that such a loss would have broken Taliban’s chain of command but, spokesman for Mullah Omer had said that the shahadat of Mullah Dadullah was a blessing. Truth is, after the shahadat of Mullah Dadullah Taliban became fan-favorite within the 0.7 million population. Logically, what would be the end of Operation Khanjar? Let’s leave it to near future but, latest report from NATO forces-the result is quite significant.
According to NATO, Taliban increased their attack-run by 60% this year. During past five months Taliban attacked aggressive forces of Cairo 5220 times. This broke the record of attacks on occupier forces of past nine years and increased the hold of Taliban by remarkably 20% to 30%. The result of decisive battle in Helmand can be assessed by news of BBC. According to the news, The British Defense Ministry announced that eight British army men got killed in the past week. Thus, a total of 184 British soldiers got killed in bloodshed and massacre at Helmand. The president of British Conservative Party, David Cameron said with sheer grief that the entire British nation is grieved upon the deaths of their sons. In Kabul, the statements issued by the troop commanders and spokesmen show their great turmoil and agony. American central chief commander General Petraeus said that next few months would be extremely difficult for Allied forces in Afghanistan. General Stanley McChrystal, new commanding chief of Allied forces, accepted that problems for Allied forces are increasing daily, Taliban still holding the rural of Afghanistan. NATO, security advisor to President Obama and American chief of staff General Michael, James Jones says that Taliban resistance is increasing against us, on the other hand in Afghan history, White house’s mules admit; no army has never been able to defeat Afghan in this region.
P. D. H. Down, former British Ambassador for Bosnia, he said in a seminar that we are losing the war and our youths are getting killed there in Afghanistan. After 9/11, The war that Bush and his evil companions started left America with economical crisis and defeat. War expenditure gifted poverty and unemployment to the Americans. Unbelievably, there has been an increase in number of people who are living in tents. One of the American State Assemblies has passed a resolution to draw army from Afghanistan. American commanders and warfare experts are accepting their defeat but, don’t know why Obama did not deny the barbaric policies of Bush and sent more reinforcement, most of which is getting killed by Taliban.
The cry for mercy of NATO and American generals has made one thing clear and that is, like so many other operations against the Afghan in the past-this operation khanjar has also gone in vain. Not any Muslim but, American and British Generals confessed themselves for the defeat. Aristotle once said, there are few mistakes correction of which is possible to an interval, later on, the same mistake makes the nations and states suffer so badly that the existence of super powers and powerful looking nations is vanished. According to the mistakes of NATO, Britain and America-Is not this saying a message of their destruction?

Restructuring industrial estates in Sindh

A high-level meeting of experts drawn from diverse spheres, recently held in Karachi on the scope of restructuring and revamping industrial estates in Sindh with the assistance of Asian Development Bank (ADB) reportedly ended on a note of consensus on changes in the organisational structure of Sindh Industrial Trading Estate (SITE) Ltd and the other industrial estates.

This came about in the wake of deliberations on other models, Punjab Industrial Estates (PIE) development and management company in particular. So much so, that its CEO Sabir Chohan was requested to make a presentation for sharing experiences of success of Punjab industrial estates for possible borrowing or adoption for restructuring and reorganising the management of public sector expenditure in the industrial estates in Sindh through Site Ltd, as the mother company.

However, as he reportedly put it, PIE is engaged in the development of Sundar Industrial Estate, besides upgrading 565 acres Quaid-e-Azam Industrial Estate at Lahore, and 743 acres Multan Industrial Estate Phase-I, besides expansion of Multan Industrial Estate (667 acres) Phase-II, setting up of combined effluent treatment plant (CETP), which is expected to be commissioned by mid-2011, and a 390 MW private power plant to be completed by 2010.

There are a number of other attributes associated with the PIE. Reference, in this context, may also be made to his revelation that in Punjab, Chairman and Directors are appointed by the government, and operation is conducted on cost basis of O&M, for which the contributions are made by industrial units.

However, Engr M A Jabbar, Chairman of Site Association of Industry (SAI), made no secret of his reluctance to consider the adoption or borrowing of the PIE organisational structure, with a pointed reference to the appointment of the chairman and directors by government as it brought into play the factors of like and dislike, thereby, creating unnecessary complications.

As against this, he maintained that the chairman should be elected on the votes of all industrial units, ie, in Sindh more than 10,000 in seven industrial estates. Similarly, he argued that the Managing Director and Secretary should be appointed from amongst professionals in the market.

Moreover, on her part, Ms Xiaoqin Fan, Senior ADB Economist, is reported to have stated that her bank regards public-private partnership as the only way for development of industrial estates in Sindh, saying ADB has been working for reforms in Sindh for the last three years so as to improve the quality of life of the people in this province.

Again, recalling that 40 years ago Pakistan, Singapore, Malaysia and Thailand were poor Asian countries, she lamented that while Pakistan remains bound in that category, the others have improved by exploiting own resources through good governance. More to this she maintained that in her opinion, Sindh should do better than other provinces because of its geographical location and nearness to sea.

All in all, it will be noted that in so far industrial activity is concerned, Sindh has a distinguishing place of its own for which it has witnessed heaviest concentration not only of mills and factories but also of diverse units of commercial and financial entities. As for the other provinces, for understandable reasons, they need not follow the example of Sindh. Now that ADB has set the pace for development of a tried and tested system of industrial estates it will be in the fitness of things to follow its lead.

Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002), also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation's securities markets. Named after sponsors U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH), the act was approved by the House by a vote of 334-90 and by the Senate 99-0. President George W. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt."[1]

The legislation set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It does not apply to privately held companies. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Harvey Pitt, the 26th chairman of the Securities and Exchange Commission (SEC), led the SEC in the adoption of dozens of rules to implement the Sarbanes-Oxley Act.

Debate continues over the perceived benefits and costs of SOX. Supporters contend the legislation was necessary and has played a useful role in restoring public confidence in the nation's capital markets by, among other things, strengthening corporate accounting controls. Opponents of the bill claim it has reduced America's international competitive edge against foreign financial service providers, saying SOX has introduced an overly complex and regulatory environment into U.S. financial markets.[2]

The act creates a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.


Sarbanes-Oxley contains 11 titles that describe specific mandates and requirements for financial reporting. Each title consists of several sections, summarized below.

  1. Public Company Accounting Oversight Board (PCAOB)
    Title I consists of nine sections and establishes the Public Company Accounting Oversight Board, to provide independent oversight of public accounting firms providing audit services ("auditors"). It also creates a central oversight board tasked with registering auditors, defining the specific processes and procedures for compliance audits, inspecting and policing conduct and quality control, and enforcing compliance with the specific mandates of SOX.
  2. Auditor Independence
    Title II consists of nine sections and establishes standards for external auditor independence, to limit conflicts of interest. It also addresses new auditor approval requirements, audit partner rotation, and auditor reporting requirements. It restricts auditing companies from providing non-audit services (e.g., consulting) for the same clients.
  3. Corporate Responsibility
    Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports quarterly [3]
  4. Enhanced Financial Disclosures
    Title IV consists of nine sections. It describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for assuring the accuracy of financial reports and disclosures, and mandates both audits and reports on those controls. It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports.
  5. Analyst Conflicts of Interest
    Title V consists of only one section, which includes measures designed to help restore investor confidence in the reporting of securities analysts. It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest.
  6. Commission Resources and Authority
    Title VI consists of four sections and defines practices to restore investor confidence in securities analysts. It also defines the SEC’s authority to censure or bar securities professionals from practice and defines conditions under which a person can be barred from practicing as a broker, advisor, or dealer.
  7. Studies and Reports
    Title VII consists of five sections and requires the Comptroller General and the SEC to perform various studies and report their findings. Studies and reports include the effects of consolidation of public accounting firms, the role of credit rating agencies in the operation of securities markets, securities violations and enforcement actions, and whether investment banks assisted Enron, Global Crossing and others to manipulate earnings and obfuscate true financial conditions.
  8. Corporate and Criminal Fraud Accountability
    Title VIII consists of seven sections and is also referred to as the “Corporate and Criminal Fraud Act of 2002”. It describes specific criminal penalties for manipulation, destruction or alteration of financial records or other interference with investigations, while providing certain protections for whistle-blowers.
  9. White Collar Crime Penalty Enhancement
    Title IX consists of two sections. This section is also called the “White Collar Crime Penalty Enhancement Act of 2002.” This section increases the criminal penalties associated with white-collar crimes and conspiracies. It recommends stronger sentencing guidelines and specifically adds failure to certify corporate financial reports as a criminal offense.
  10. Corporate Tax Returns
    Title X consists of one section. Section 1001 states that the Chief Executive Officer should sign the company tax return.
  11. Corporate Fraud Accountability
    Title XI consists of seven sections. Section 1101 recommends a name for this title as “Corporate Fraud Accountability Act of 2002”. It identifies corporate fraud and records tampering as criminal offenses and joins those offenses to specific penalties. It also revises sentencing guidelines and strengthens their penalties. This enables the SEC the resort to temporarily freeze transactions or payments that has been deemed "large" or "unusual".

History and context: events contributing to the adoption of Sarbanes-Oxley

A variety of complex factors created the conditions and culture in which a series of large corporate frauds occurred between 2000-2002. The spectacular, highly-publicized frauds at Enron (see Enron scandal), WorldCom, and Tyco exposed significant problems with conflicts of interest and incentive compensation practices. The analysis of their complex and contentious root causes contributed to the passage of SOX in 2002.[4] In a 2004 interview, Senator Paul Sarbanes stated:
The Senate Banking Committee undertook a series of hearings on the problems in the markets that had led to a loss of hundreds and hundreds of billions, indeed trillions of dollars in market value. The hearings set out to lay the foundation for legislation. We scheduled 10 hearings over a six-week period, during which we brought in some of the best people in the country to testify...The hearings produced remarkable consensus on the nature of the problems: inadequate oversight of accountants, lack of auditor independence, weak corporate governance procedures, stock analysts' conflict of interests, inadequate disclosure provisions, and grossly inadequate funding of the Securities and Exchange Commission.[5]
  • Auditor conflicts of interest: Prior to SOX, auditing firms, the primary financial "watchdogs" for investors, were self-regulated. They also performed significant non-audit or consulting work for the companies they audited. Many of these consulting agreements were far more lucrative than the auditing engagement. This presented at least the appearance of a conflict of interest. For example, challenging the company's accounting approach might damage a client relationship, conceivably placing a significant consulting arrangement at risk, damaging the auditing firm's bottom line.
  • Boardroom failures: Boards of Directors, specifically Audit Committees, are charged with establishing oversight mechanisms for financial reporting in U.S. corporations on the behalf of investors. These scandals identified Board members who either did not exercise their responsibilities or did not have the expertise to understand the complexities of the businesses. In many cases, Audit Committee members were not truly independent of management.
  • Securities analysts' conflicts of interest: The roles of securities analysts, who make buy and sell recommendations on company stocks and bonds, and investment bankers, who help provide companies loans or handle mergers and acquisitions, provide opportunities for conflicts. Similar to the auditor conflict, issuing a buy or sell recommendation on a stock while providing lucrative investment banking services creates at least the appearance of a conflict of interest.
  • Inadequate funding of the SEC: The SEC budget has steadily increased to nearly double the pre-SOX level.[6]In the interview cited above, Sarbanes indicated that enforcement and rule-making are more effective post-SOX.
  • Banking practices: Lending to a firm sends signals to investors regarding the firm's risk. In the case of Enron, several major banks provided large loans to the company without understanding, or while ignoring, the risks of the company. Investors of these banks and their clients were hurt by such bad loans, resulting in large settlement payments by the banks. Others interpreted the willingness of banks to lend money to the company as an indication of its health and integrity, and were led to invest in Enron as a result. These investors were hurt as well.
  • Internet bubble: Investors had been stung in 2000 by the sharp declines in technology stocks and to a lesser extent, by declines in the overall market. Certain mutual fund managers were alleged to have advocated the purchasing of particular technology stocks, while quietly selling them. The losses sustained also helped create a general anger among investors.
  • Executive compensation: Stock option and bonus practices, combined with volatility in stock prices for even small earnings "misses," resulted in pressures to manage earnings.[7] Stock options were not treated as compensation expense by companies, encouraging this form of compensation. With a large stock-based bonus at risk, managers were pressured to meet their targets.

Timeline and passage of Sarbanes-Oxley

The House passed Rep. Oxley's bill (H.R. 3763) on April 25, 2002, by a vote of 334 to 90. The House then referred the "Corporate and Auditing Accountability, Responsibility, and Transparency Act" or "CAARTA" to the Senate Banking Committee with the support of President George W. Bush and the SEC. At the time, however, the Chairman of that Committee, Senator Paul Sarbanes (D-MD), was preparing his own proposal, Senate Bill 2673.

Senator Sarbanes’s bill passed the Senate Banking Committee on June 18, 2002, by a vote of 17 to 4. On June 25, 2002, WorldCom revealed it had overstated its earnings by more than $3.8 billion during the past five quarters (15 months), primarily by improperly accounting for its operating costs. Sen. Sarbanes introduced Senate Bill 2673 to the full Senate that same day, and it passed 97-0 less than three weeks later on July 15, 2002.

The House and the Senate formed a Conference Committee to reconcile the differences between Sen. Sarbanes's bill (S. 2673) and Rep. Oxley's bill (H.R. 3763). The conference committee relied heavily on S. 2673 and “most changes made by the conference committee strengthened the prescriptions of S. 2673 or added new prescriptions.” (John T. Bostelman, The Sarbanes-Oxley Deskbook § 2-31.)

The Committee approved the final conference bill on July 24, 2002, and gave it the name "the Sarbanes-Oxley Act of 2002." The next day, both houses of Congress voted on it without change, producing an overwhelming margin of victory: 423 to 3 in the House and 99 to 0 in the Senate. On July 30, 2002, President George W. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt." [1]

Analyzing the cost-benefits of Sarbanes-Oxley

A significant body of academic research and opinion exists regarding the costs and benefits of SOX, with significant differences in conclusions. This is due in part to the difficulty of isolating the impact of SOX from other variables affecting the stock market and corporate earnings.[8][9] Conclusions from several of these studies and related criticism are summarized below:

Compliance costs

  • FEI Survey (Annual): Finance Executives International (FEI) provides an annual survey on SOX Section 404 costs. These costs have continued to decline relative to revenues since 2004. The 2007 study indicated that, for 168 companies with average revenues of $4.7 billion, the average compliance costs were $1.7 million (0.036% of revenue).[10] The 2006 study indicated that, for 200 companies with average revenues of $6.8 billion, the average compliance costs were $2.9 million (0.043% of revenue), down 23% from 2005. Cost for decentralized companies (i.e., those with multiple segments or divisions) were considerably more than centralized companies. Survey scores related to the positive effect of SOX on investor confidence, reliability of financial statements, and fraud prevention continue to rise. However, when asked in 2006 whether the benefits of compliance with Section 404 have exceeded costs in 2006, only 22 percent agreed.[11]
  • Foley & Lardner Survey (2007): This annual study focused on changes in the total costs of being a U.S. public company, which were significantly affected by SOX. Such costs include external auditor fees, directors and officers (D&O) insurance, board compensation, lost productivity, and legal costs. Each of these cost categories increased significantly between FY2001-FY2006. Nearly 70% of survey respondents indicated public companies with revenues under $251 million should be exempt from SOX Section 404.[12]
  • Zhang (2005): This research paper estimated SOX compliance costs as high as $1.4 trillion, by measuring changes in market value around key SOX legislative "events." This number is based on the assumption that SOX was the cause of related short-duration market value changes, which the author acknowledges as a drawback of the study.[13]

Benefits to firms and investors

  • Iliev (2007): This research paper indicated that SOX 404 indeed led to conservative reported earnings, but also reduced -- rightly or wrongly -- stock valuations of small firms.[14] Lower earnings often cause the share price to decrease.
  • Butler/Ribstein (2006): Their book proposed a comprehensive overhaul or repeal of SOX and a variety of other reforms. For example, they indicate that investors could diversify their stock investments, efficiently managing the risk of a few catastrophic corporate failures, whether due to fraud or competition. However, if each company is required to spend a significant amount of money and resources on SOX compliance, this cost is borne across all publicly traded companies and therefore cannot be diversified away by the investor.[15]
  • Skaife/Collins/Kinney/Lefond (2006): This research paper indicates that borrowing costs are lower for companies that improved their internal control, by between 50 and 150 basis points (.5 to 1.5 percentage points).[16]
  • Lord & Benoit Report (2006): Do the Benefits of 404 Exceed the Cost? A study of a population of nearly 2,500 companies indicated that those with no material weaknesses in their internal controls, or companies that corrected them in a timely manner, experienced much greater increases in share prices than companies that did not.[17][18] The report indicated that the benefits to a compliant company in share price (10% above Russell 3000 index) were greater than their SOX Section 404 costs.
  • Institute of Internal Auditors (2005): The research paper indicates that corporations have improved their internal controls and that financial statements are perceived to be more reliable.[19]

Effects on exchange listing choice of non-US companies

Some have asserted that Sarbanes-Oxley legislation has helped displace business from New York to London, where the Financial Services Authority regulates the financial sector with a lighter touch. In the UK, the non-statutory Combined Code of Corporate Governance plays a somewhat similar role to SOX. See Howell E. Jackson & Mark J. Roe, “Public Enforcement of Securities Laws: Preliminary Evidence” (Working Paper January 16, 2007). The Alternative Investment Market claims that its spectacular growth in listings almost entirely coincided with the Sarbanes Oxley legislation. In December 2006 Michael Bloomberg, New York's mayor, and Charles Schumer, a US senator, expressed their concern.[20]

The Sarbanes-Oxley Act's effect on non-US companies cross-listed in the US is different on firms from developed and well regulated countries than on firms from less developed countries according to Kate Litvak.[21] Companies from badly regulated countries benefit from better credit ratings by complying to regulations in a highly regulated country (USA) that is higher than the cost, but companies from developed countries only incur the cost, since transparency is adequate in their home countries as well. On the other hand, the benefit of better credit rating also comes with listing on other stock exchanges such as the London Stock Exchange.

Piotroski and Srinivasan (2008) examine a comprehensive sample of international companies that list onto U.S. and U.K. stock exchanges before and after the enactment of the Act in 2002. Using a sample of all listing events onto U.S. and U.K. exchanges from 1995-2006, they find that the listing preferences of large foreign firms choosing between U.S. exchanges and the LSE's Main Market did not change following SOX. In contrast, they find that the likelihood of a U.S. listing among small foreign firms choosing between the Nasdaq and LSE's Alternative Investment Market decreased following SOX. The negative effect among small firms is consistent with these companies being less able to absorb the incremental costs associated with SOX compliance. The screening of smaller firms with weaker governance attributes from U.S. exchanges is consistent with the heightened governance costs imposed by the Act increasing the bonding-related benefits of a U.S. listing. [22]

Implementation of key provisions

Sarbanes-Oxley Section 302: Internal controls

Under Sarbanes-Oxley, two separate sections came into effect—one civil and the other criminal. 15 U.S.C. § 7241 (Section 302) (civil provision); 18 U.S.C. § 1350 (Section 906) (criminal provision).

Section 302 of the Act mandates a set of internal procedures designed to ensure accurate financial disclosure. The signing officers must certify that they are “responsible for establishing and maintaining internal controls” and “have designed such internal controls to ensure that material information relating to the company and its consolidated subsidiaries is made known to such officers by others within those entities, particularly during the period in which the periodic reports are being prepared.” 15 U.S.C. § 7241(a)(4). The officers must “have evaluated the effectiveness of the company’s internal controls as of a date within 90 days prior to the report” and “have presented in the report their conclusions about the effectiveness of their internal controls based on their evaluation as of that date.” Id..

The SEC interpreted the intention of Sec. 302 in Final Rule 33-8124. In it, the SEC defines the new term "disclosure controls and procedures", which are distinct from "internal controls over financial reporting".[23] Under both Section 302 and Section 404, Congress directed the SEC to promulgate regulations enforcing these provisions.[24]

External auditors are required to issue an opinion on whether effective internal control over financial reporting was maintained in all material respects by management. This is in addition to the financial statement opinion regarding the accuracy of the financial statements. The requirement to issue a third opinion regarding management's assessment was removed in 2007.

Sarbanes-Oxley Section 404: Assessment of internal control

The most contentious aspect of SOX is Section 404, which requires management and the external auditor to report on the adequacy of the company's internal control over financial reporting (ICFR). This is the most costly aspect of the legislation for companies to implement, as documenting and testing important financial manual and automated controls requires enormous effort.[25]

Under Section 404 of the Act, management is required to produce an “internal control report” as part of each annual Exchange Act report. See 15 U.S.C. § 7262. The report must affirm “the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting.” 15 U.S.C. § 7262(a). The report must also “contain an assessment, as of the end of the most recent fiscal year of the Company, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting.” To do this, managers are generally adopting an internal control framework such as that described in COSO.

To help alleviate the high costs of compliance, guidance and practice have continued to evolve. The Public Company Accounting Oversight Board (PCAOB) approved Auditing Standard No. 5 for public accounting firms on July 25, 2007.[26] This standard superseded Auditing Standard No. 2, the initial guidance provided in 2004. The SEC also released its interpretive guidance [27] on June 27, 2007. It is generally consistent with the PCAOB's guidance, but intended to provide guidance for management. Both management and the external auditor are responsible for performing their assessment in the context of a top-down risk assessment, which requires management to base both the scope of its assessment and evidence gathered on risk. This gives management wider discretion in its assessment approach. These two standards together require management to:

  • Assess both the design and operating effectiveness of selected internal controls related to significant accounts and relevant assertions, in the context of material misstatement risks;
  • Understand the flow of transactions, including IT aspects, sufficient enough to identify points at which a misstatement could arise;
  • Evaluate company-level (entity-level) controls, which correspond to the components of the COSO framework;
  • Perform a fraud risk assessment;
  • Evaluate controls designed to prevent or detect fraud, including management override of controls;
  • Evaluate controls over the period-end financial reporting process;
  • Scale the assessment based on the size and complexity of the company;
  • Rely on management's work based on factors such as competency, objectivity, and risk;
  • Conclude on the adequacy of internal control over financial reporting.

SOX 404 compliance costs represent a tax on inefficiency, encouraging companies to centralize and automate their financial reporting systems. This is apparent in the comparative costs of companies with decentralized operations and systems, versus those with centralized, more efficient systems. For example, the 2007 FEI survey indicated average compliance costs for decentralized companies were $1.9 million, while centralized company costs were $1.3 million.[28] Costs of evaluating manual control procedures are dramatically reduced through automation.

Sarbanes-Oxley 404 and smaller public companies

The cost of complying with SOX 404 impacts smaller companies disproportionately, as there is a significant fixed cost involved in completing the assessment. For example, during 2004 U.S. companies with revenues exceeding $5 billion spent 0.06% of revenue on SOX compliance, while companies with less than $100 million in revenue spent 2.55%.[29]

This disparity is a focal point of 2007 SEC and U.S. Senate action.[30] The PCAOB intends to issue further guidance to help companies scale their assessment based on company size and complexity during 2007. The SEC issued their guidance to management in June, 2007.[31]

After the SEC and PCAOB issued their guidance, the SEC required smaller public companies (non-accelerated filers) with fiscal years ending after December 15, 2007 to document a Management Assessment of their Internal Controls over Financial Reporting (ICFR). Outside auditors of non-accelerated filers however opine or test internal controls under PCAOB (Public Company Accounting Oversight Board) Auditing Standards for years ending after December 15, 2008. Another extension was granted by the SEC for the outside auditor assessment until years ending after December 15, 2009. The reason for the timing disparity was to address the House Committee on Small Business concern that the cost of complying with Section 404 of the Sarbanes-Oxley Act of 2002 was still unknown and could therefore be disproportionately high for smaller publicly held companies.[32]

Sarbanes-Oxley Section 802: Criminal penalties for violation of SOX

Section 802(a) of the SOX, 18 U.S.C. § 1519 states:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

[edit] Sarbanes Oxley Section 1107: Criminal penalties for retaliation against whistle blowers

Section 1107 of the SOX 18 U.S.C. § 1513(e) states:[33]

Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, shall be fined under this title, imprisoned not more than 10 years, or both.


Congressman Ron Paul and others contend that SOX was an unnecessary and costly government intrusion into corporate management that places U.S. corporations at a competitive disadvantage with foreign firms, driving businesses out of the United States. In an April 14, 2005 speech before the U.S. House of Representatives, Paul stated, "These regulations are damaging American capital markets by providing an incentive for small US firms and foreign firms to deregister from US stock exchanges. According to a study by Wharton Business School, the number of American companies deregistering from public stock exchanges nearly tripled during the year after Sarbanes-Oxley became law, while the New York Stock Exchange had only 10 new foreign listings in all of 2004. The reluctance of small businesses and foreign firms to register on American stock exchanges is easily understood when one considers the costs Sarbanes-Oxley imposes on businesses. According to a survey by Korn/Ferry International, Sarbanes-Oxley cost Fortune 500 companies an average of $5.1 million in compliance expenses in 2004, while a study by the law firm of Foley and Lardner found the Act increased costs associated with being a publicly held company by 130 percent." [34]

A research study published by Joseph Piotroski of Stanford University and Suraj Srinivasan of Harvard Business School titled "Regulation and Bonding: Sarbanes Oxley Act and the Flow of International Listings" in the Journal of Accounting Research in 2008 found that following the act's passage, smaller international companies were more likely to list in stock exchanges in the U.K. rather than U.S. stock exchanges.[35]

During the financial crisis, critics blamed Sarbanes-Oxley for the low number of Initial Public Offerings (IPOs) on American stock exchanges during 2008. In November 2008, Newt Gingrich and co-author David W. Kralik called on Congress to repeal Sarbanes-Oxley.[36]

A December 21, 2008 Wall St. Journal editorial stated, "The new laws and regulations have neither prevented frauds nor instituted fairness. But they have managed to kill the creation of new public companies in the U.S., cripple the venture capital business, and damage entrepreneurship. According to the National Venture Capital Association, in all of 2008 there have been just six companies that have gone public. Compare that with 269 IPOs in 1999, 272 in 1996, and 365 in 1986."

Hoover's IPO Scorecard notes 31 IPOs in 2008 [37].

The editorial concludes that: "For all of this, we can first thank Sarbanes-Oxley. Cooked up in the wake of accounting scandals earlier this decade, it has essentially killed the creation of new public companies in America, hamstrung the NYSE and Nasdaq (while making the London Stock Exchange rich), and cost U.S. industry more than $200 billion by some estimates." [38]

Previously the number of IPOs had declined to 87 in 2001, well down from the highs, but before Sarbanes-Oxley was passed. [39] In 2004, IPOs were up 195% from the previous year to 233.[40]. There were 196 IPOs in 2005, 205 in 2006 (with a sevenfold increase in deals over $1 billion) and 209 in 2007. [41][42]


Former Federal Reserve Chairman Alan Greenspan praised the Sarbanes-Oxley Act: "I am surprised that the Sarbanes-Oxley Act, so rapidly developed and enacted, has functioned as well as it has...the act importantly reinforced the principle that shareholders own our corporations and that corporate managers should be working on behalf of shareholders to allocate business resources to their optimum use.”[43]

SOX has been praised by a cross-section of financial industry experts, citing improved investor confidence and more accurate, reliable financial statements. The CEO and CFO are now required to unequivocally take ownership for their financial statements under Section 302, which was not the case prior to SOX. Further, auditor conflicts of interest have been addressed, by prohibiting auditors from also having lucrative consulting agreements with the firms they audit under Section 201. SEC Chairman Christopher Cox stated in 2007: "Sarbanes-Oxley helped restore trust in U.S. markets by increasing accountability, speeding up reporting, and making audits more independent."[44]

The FEI 2007 study and research by the Institute of Internal Auditors (IIA) also indicate SOX has improved investor confidence in financial reporting, a primary objective of the legislation. The IIA study also indicated improvements in board, audit committee, and senior management engagement in financial reporting and improvements in financial controls.[45][46]

Financial restatements increased significantly in the wake of the SOX legislation and have since dramatically declined, as companies "cleaned up" their books. Glass, Lewis & Co. LLC is a San Francisco-based firm that tracks the volume of do-overs by public companies. Its March 2006 report, "Getting It Wrong the First Time," shows 1,295 restatements of financial earnings in 2005 for companies listed on U.S. securities markets, almost twice the number for 2004. "That's about one restatement for every 12 public companies—up from one for every 23 in 2004," says the report.[47]

Legal challenges

A lawsuit (Free Enterprise Fund v. Public Company Accounting Oversight Board) was filed in 2006 challenging the constitutionality (legality) of the PCAOB. The complaint argues that because the PCAOB has regulatory powers over the accounting industry, its officers should be appointed by the President, rather than the SEC.[48]Further, because the law lacks a "severability clause," if part of the law is judged unconstitutional, so is the remainder. If the plaintiff prevails, the U.S. Congress may have to devise a different method of officer appointment. Further, the other parts of the law may be open to revision.[49] The lawsuit was dismissed from a District Court; the decision was upheld by the Court of Appeals on August 22, 2008.[50] Judge Kavanaugh, in his dissent, argued strongly against the constitutionality of the law.[51] On May 18, 2009, The United States Supreme Court agreed to hear this case.

See also

Similar laws in other countries

  • Bill 198 — Ontario, Canada, equivalent of Sarbanes-Oxley Act
  • J-SOX — Japanese equivalent of Sarbanes-Oxley Act
  • German Corporate Governance Code (at the German Wikipedia)
  • CLERP9 — Australian corporate reporting and disclosure law
  • Financial Security Law of France ("Loi sur la Sécurité Financière") — French equivalent of Sarbanes-Oxley Act
  • L262/2005 ("Disposizioni per la tutela del risparmio e la disciplina dei mercati finanziari") — Italian equivalent of Sarbanes-Oxley Act for financial services institutions
  • King Report — South African corporate governance code


  1. ^ a b Bumiller, Elisabeth (2002-07-31). "Bush Signs Bill Aimed at Fraud in Corporations". The New York Times.
  2. ^ A Mckinsey & Company study commissioned by NYC Mayor Michael Bloomberg and U.S. Sen. Charles Schumer, (D-N.Y.), cites this as one reason America's financial sector is losing market share to other financial centers worldwide. Reference
  3. ^ Kuschnik, Bernhard; The Sarbanes Oxley Act: "Big Brother is watching" you or Adequate Measures of Corporate Governance Regulation? 5 Rutgers Business Law Journal [2008], 64 - 95; available at
  4. ^ Farrell, Greg. "America Robbed Blind." Wizard Academy Press: 2005
  5. ^ Sarbanes Interview
  6. ^ SEC Annual Budget
  7. ^ SEC Levitt Speech The Numbers Game
  8. ^ "Five years of Sarbanes-Oxley". The Economist. 2007-07-26.
  9. ^ Shakespeare, Catharine (2008). "Sarbanes-Oxley Act of 2002 Five Years On: What Have We Learned?". Journal of Business & Technology Law: 333.
  10. ^ FEI 2007 Survey of SOX 404 Costs
  11. ^ FEI 2006 Survey of SOX 404 Costs
  12. ^ Foley & Lardner 2007 Study
  13. ^ Zhang-Economic Costs of SOX
  14. ^ The Effect of the Sarbanes-Oxley Act (Section 404) Management's Report on Audit Fees, Accruals and Stock Returns
  15. ^ The Sarbanes-Oxley Debacle
  16. ^ The Effect of Internal Control Deficiencies on Firm Risk and Cost of Capital
  17. ^ Lord & Benoit Report
  18. ^ Benoit WSJ
  19. ^ IIA Research SOX Looking at the Benefits
  20. ^ Bloomberg-Schumer report
  21. ^ SSRN-The Effect of the Sarbanes-Oxley Act on Non-US Companies Cross-Listed in the US by Kate Litvak
  22. ^ Piotroski, Joseph D. and Srinivasan, Suraj, Regulation and Bonding: The Sarbanes-Oxley Act and the Flow of International Listings(January 2008). Available at SSRN:
  23. ^
  24. ^ SEC Final Rules 33-8238
  25. ^ See New Center for Data Analysis Report
  26. ^ PCAOB Auditing Standard No. 5
  27. ^ SEC Interpretive Guidance
  28. ^ FEI Survey 2007
  29. ^ SEC Advisory Cmte. Report - See charts on pages 33-34.
  30. ^ Dodd-Shelby Amendment
  31. ^ SEC 2007 SOX Guidance
  32. ^ Sarbanes-Oxley: Progressive Punishment for Regressive Victimization, 44 Hous. L. Rev. 95 (2007)
  33. ^ Stephen M. Kohn, Michael D. Kohn, and David K. Colapinto (2004). Whistleblower Law: A Guide to Legal Protections for Corporate Employees. Praeger Publishers. ISBN 0-275-98127-4
  34. ^ Repeal Sarbanes-Oxley! Ron Paul, April 14, 2005
  35. ^ Piotroski, Joseph D. and Srinivasan, Suraj, Regulation and Bonding: The Sarbanes-Oxley Act and the Flow of International Listings(January 2008). Available at SSRN:
  36. ^ Gingrich
  37. ^ Hoover's IPO Scorecard Reveals Major Decline In 2008
  38. ^ Washington Is Killing Silicon Valley, Wall St. Journal, December 21, 2008
  39. ^
  40. ^ Number of IPOs in 2004 Increased by 195%
  41. ^ Hoover's IPO Scorecard Reveals Increase In Momentum In 2006, Along With Seven-Fold Increase In Number of $1 Billion-Plus Deals
  42. ^ Hoover's IPO Scorecard Reveals Only Slight Growth in 2007.
  43. ^ Greenspan praises SOX
  44. ^ USA Today - SOX Law Has Been a Pretty Clean Sweep
  45. ^ FEI Survey
  46. ^ IIA Study
  47. ^ Glass Lewis Survey of Restatements
  48. ^
  49. ^ Washington Post
  50. ^ PCAOB News Release
  51. ^ NY Sun Editorial

External links