The Costs of Sarbanes-Oxley

No, this post is definitely not what you’re thinking. Its not about how more and more companies are looking into going private or going to markets like AIM instead to try to avoid the increasingly greater burden of legislation like SOX.  In fact, quite different altogether. Its a story about how Apple will be charging a few dollars to unlock a feature already built into one of its products. That in itself is nothing particularly earth-shattering. What is a bit wonky is the reason Apple cites. According to another story at iLounge, its because of SOX:

Another Apple representative has added details on the Sarbanes situation: it’s about accounting. Because of the Act, the company believes that if it sells a product, then later adds a feature to that product, it can be held liable for improper accounting if it recognizes revenue from the product at the time of sale, given that it hasn’t finished delivering the product at that point. Ridiculous.

I don’t purport to be an expert on SOX but I thought it had to do with internal controls, rather than accounting standards, which I thought, if memory serves, were still at least primarily driven by the pronouncements of the Financial Accounting Standards Board in the US, and not SOX.

So, if you are the proud owner of Core 2 Duo Macintosh, you too will be personally experiencing the cost consequences of SOX, even if you are not a US public corporation. And you can’t even avoid it by going private. Very odd indeed.