If it weren’t for the corporate accountability law that bears his name, former Maryland Sen. Paul C. Sarbanes probably wouldn’t have anywhere near the notoriety he still has.

Nine years after passage of the Sarbanes-Oxley Act, after most of the controversy and complaints have died down, Sarbanes still speaks about the law to students, business groups and others. Attempts to reach Sarbanes through both his former aide and the office of his son John, now a U.S. House member from Towson, were unsuccessful, but videos of his talks are not hard to find.

In an address to students at Ohio State University’s Fisher College of Business last April, Sarbanes explained how it wasn’t just Enron executives’ criminal acts that spurred the corporate accountability law.

“A number of companies engaged in often fraudulent accounting practices to drive up their stock prices,” he said, according to a video on the college’s website. “It wasn’t just a few bad apples but was a systemic breakdown.”

Before the law that formed the Public Company Accounting Oversight Board, a private regulatory entity, the accounting industry had been largely self-regulated through peer review, he said. The law requires accounting firms that audit public companies to register with the accounting board, which then reviews and sets auditing standards.

“It especially demands that accountants maintain independence from their clients,” Sarbanes said.

In a 2008 address at the Asian Banker Summit, an annual global conference, Sarbanes acknowledged that “legitimate concerns have been raised about the cost of compliance, particularly for smaller companies.”

“I am opposed to unnecessary regulation. But I am for needed regulation,” he said. As for the sticky matter of what exactly “needed regulation” is, that requires “a lot of critical analysis and a lot of wise judgment.”

In a survey of executives at public companies conducted late last year and early this year by Protiviti, about half said the law had helped improve operational efficiency. Only 14 percent said there had been no benefits to their businesses.

Having internal controls helps maintain investors and public trust in companies, Sarbanes said. If someone from a company said it didn’t have a system of financial internal controls, “I doubt very much you would invest your money in that company,” he said.

“The whole thrust of Sarbanes-Oxley was to assure the investor that the reports they were receiving on the financial conditon of companies were transparent, were honest, were accurate, were information they could rely upon in order to make investment decisions,” he said.

The act does get a bad reputation, often blamed for regulations and situations that have nothing to do with the law, Sarbanes said. One person told him that when the water fountain doesn’t work at her company, someone will blame Sarbanes-Oxley, he said.

“We get blamed for everything that’s going on,” he said. “If you go home this evening and your spouse begins to fuss at you, just say it’s Sarbanes-Oxley that did it.”

Sarbanes’ April address to students at Ohio State is available at https://fisher.osu.edu/blogs/macc-admissions/2011/05/03/an-inside-look-at-sen-sarbanes-visit-to-fisher-college-of-business-ohio-state-on-april-12/.

kshay@gazette.net