The Sarbanes-Oxley Act of 2002 (SOX) has been a remarkable success. It stands as a shining example of effective, bipartisan policymaking that has strengthened our capital markets and economy. But you don’t have to take my word for it.

Listen to chief financial officers. A 2017 poll revealed that 79 percent of CFOs feel that the overall quality of information in audited financial statements has improved since the enactment of SOX. Eighty-five percent of CFOs believe the internal control over financial reporting (ICFR) audit function has helped their company.

Listen to financial advisors. A separate 2017 poll found that 82 percent of financial advisors believe the law has improved the reliability of financial information.

Listen to current and former policymakers from Democratic and Republican administrations. Securities and Exchange Commission (SEC) Chairman Jay Clayton has said that the independent audit committee, a key requirement that SOX established, has been “one of the most significant and efficient drivers of value to Main Street investors.” Harvey Pitt, who chaired the SEC from 2001 to 2003, observed in 2017 that SOX “provided the accounting profession with much greater leverage and the ability to improve audit quality than it had before the Act.” And Mary Schapiro, SEC chair from 2009 to 2012, has said that SOX “has been highly responsive to the financial frauds and crises that had emerged at that time.” In terms of the law’s outcomes, she said, “it’s been highly successful.”

Yes, SOX still has its share of critics as well, who tend to point out the costs that came about because of the law. There’s no denying that SOX did bring about new costs, just like any legislation that sets up regulatory processes and protections for investors.

The Sarbanes-Oxley Act of 2002 has been a remarkable success. It stands as a shining example of effective, bipartisan policymaking that has strengthened our capital markets and economy.

Any discussion of costs, however, cannot ignore benefits, and the benefits of SOX are vast and in many cases quantifiable. Take ICFR, for example. SOX 404(a) requires management to evaluate the effectiveness of the company’s system of ICFR, which has been required by federal law since 1977. SOX 404(b) requires a registered public accountant to attest to and report on management’s ICFR assessment.

Researchers have studied the impact of these provisions extensively. They have found companies that voluntarily comply with Section 404 have fewer financial restatements, as well as a lower cost of capital-and that includes smaller companies.

And what about the costs and benefits of independent audit committees? SEC Chief Accountant Wesley Bricker has pointed out that “the academic literature has long documented the importance of the independence and expertise of audit committees,” with recent studies emphasizing “the vital role audit committees have in the oversight of the independent auditor, audits, and financial reporting.”

Chairman Clayton does not mince words when it comes to the benefits of strong audit committees. “We have put more responsibility on audit committee members” he said in December 2017, “but the benefits are incredible compared to that cost.”

In addition to academics, CFOs, financial advisors, and policymakers, there is another important group to heed when it comes to SOX: Main Street investors. After all, SOX was passed expressly in order “to protect investors by improving the accuracy and reliability of corporate disclosures.”

A generation after SOX’s passage, investor confidence in the United States stands at strong, even record-breaking, levels. A 2017 Center for Audit Quality survey showed that investors have robust confidence in audited financial statements, and they continue to see both independent auditors and audit committees as highly effective in their investor protection roles. Eighty-five percent 85 percent of retail investors expressed confidence in U.S. capital markets, according to the survey, and 83 percent of investors expressed confidence in companies that are publicly traded (up from 70 percent in 2010).

These last indicators are perhaps the most important of all, as strong investor confidence is the lifeblood of our financial markets. On that score and many others, SOX has stood the test of time as a remarkable success.

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