While corporate-finance professionals might generally agree with the saying, “you can’t manage what you can’t measure,” many believe that Sarbanes-Oxley—and especially the subsequent Auditing Standard No. 2—have created measurement overkill.
The tried-and-true method of management by measurement is by documentation: the theory that companies should document how things are supposed to be done, then lay down the yardstick and see if reality measures up to the standard. That, in essence, is what SOX and AS2 require with regard to internal control over financial reporting.
