Investments, tenth edition

centre/codes/ethics   

 WORDS FROM THE STREET 

bod61671_ch03_059-091.indd   85

bod61671_ch03_059-091.indd   85

7/25/13   2:14 AM

7/25/13   2:14 AM

Final PDF to printer

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86  P A R T  

I

 Introduction

  

4

 Jeffrey E. Jaffee, “Special Information and Insider Trading,”  Journal of Business  47 (July 1974). 

   • 

Auditors may no longer provide several other services to their clients. This is 

intended to prevent potential profits on consulting work from influencing the 

quality of their audit.  

   • 

The Board of Directors must be composed of independent directors and hold 

regular meetings of directors in which company management is not present (and 

therefore cannot impede or influence the discussion).    

 More recently, there has been a fair amount of pushback on Sarbanes-Oxley. Many 

observers believe that the compliance costs associated with the law are too onerous, 

 especially for smaller firms, and that heavy-handed regulatory oversight is giving for-

eign locales an undue advantage over the United States when firms decide where to 

list their securities. Moreover, the efficacy of single-country regulation is being tested 

in the face of increasing globalization and the ease with which funds can move across 

national borders.