The costs [of Sarbanes-Oxley] are relatively easy to delineate. The benefits are harder to delineate, but that doesn't mean they don't exist.

As reported by Market News International

To some extent, the declining relative position of the American exchanges reflects the natural growth and development of exchanges abroad, in London, in Asia and so on. And as those economies, those exchanges become larger, more efficient, deeper, that's actually not a bad thing, because it gives, for example, American companies more alternatives for raising money.

 On the other hand, to the extent that business is being drive off shore by high regulatory costs, as was the conclusion of these two recent studies on capital market competitiveness, then that's a problem, and we need to begin to address those costs.

The Sarbanes-Oxley issue that you raised earlier has been cited by a number of these studies, and the SEC and the Public Company Accounting Oversight Board have recently issued a new audit standard which will attempt to reduce the costs of implementing Sarbanes-Oxley's Section 404 on internal controls, and in particular to make it more focused on the most important matters, rather than on trivial matters, and also more appropriate for smaller and less complex firms.

 So I think that's going to be an important step in reducing that particular set of costs.

Despite frequent reports from bankers that their compliance costs have increased significantly and that they have incurred some significant nonrecurring charges, expense control in the industry has been good.

Beyond the financial markets' reaction, these revelations also triggered reforms legislated under the Sarbanes-Oxley Act. The act was designed to boost investor confidence in corporate America by improving the quality of corporate disclosure and financial reporting and increasing the role and responsibility of corporate officers and directors...While this may have been appropriate and necessary, it also has diverted companies' attention from new investment projects and slowed plans for future expansion.

[The Sarbanes-Oxley Act] brings a very substantial cost...Based on anecdotal reports, I do have the sense that the extraordinary attention devoted to the new corporate governance rules very likely delayed strategic business decisions and capital investment decisions that we would have seen earlier as the economy recovered from the 2001 recession...The money to pay for improved corporate governance comes out of corporate profits and represents another price we are all paying for corporate fraud and deception.

[It is possible] that in light of Sarbanes-Oxley and the increased scrutiny that firms face as a result of ongoing corporate and accounting scandals, companies have become more risk averse and less willing to commit themselves to new expenditures of capital or labor without a good deal of confidence that they will still “make their numbers.” Certainly, I hear anecdotes about the time, attention and resources senior management must now apply to these issues, especially as the rules regarding how financial controls are monitored and managed are put into place.