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Our Bureau

Chennai , Feb. 2

THE Sarbanes Oxley Act attempts to solve problems that did not exist, according to Mr Shyam Sunder, James L. Frank Professor of Accounting, Economics and Finance, Yale School of Management, and President-elect of the American Accounting Association.

Speaking to the press at the Great Lakes Institute of Management, where he is visiting faculty member, he said that while the regulations may give the accounting profession as well as law firms a boost, it did not add any value to corporate governance.

He said that the reason why the quality of auditing decreased in the US was because of the Government push to increase competition in that industry, starting in the 1970s. He said that therefore, the problem requires structural and not procedural changes.

He said that SEBI's Clause 49 should not look to apply restrictions either. He said that one possible solution was to do away with the monopoly of accounting regulations. That way, multiple regulatory authorities would compete with one another, allowing for companies to choose the best. He said that in the end, it is the role of the shareholders to keep tabs on the company.

He said that the quality of corporate governance in India would determine investment not only from foreign countries but also within India.

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