Sarbanes-Oxley

First, we had the stupidly anti-constitutional "Thompson Memo" which stated that the Department of Justice would only consider a corporation to cooperative in an investigation if it waived attorney-client privilege. Just recently, the Department of Justice stopped the insanity and replaced the Thomposon Memo with the McNulty Memo which reverses that course of action stating that it was counter-productive. Gee, really?

Now, Sarbanes-Oxley strikes again. The ridiculous act which has caused the international financial community to abandon US IPO's for international companies, leading London to be the king of the financial hill, has now directly caused a cost on US consumers. The Act which was supposed to protect investors and make corporations more transparent has added so many layers of complexity to corporate accounting and reporting that the costs are now becoming apparent to consumers as it forces corporations to make decisions adverse to the general public so that they may contort themselves to fit within the absurd constrictures of the Act and its progeny, most importantly changes to Generally Accepted Accounting Principles.

Without getting into why GAAP distorts the financial picture of public companies and makes it impossible for a normal human to comprehend the actual financial health of a company, let's just get to the example.

Apple, Inc. (formerly known as Apple Computer), has announced that due to changes in GAAP mandated by Sarbanes-Oxley it will have to charge for a software patch to update a chip in its new computers that will allow the computers to access 802.11n Wi-Fi devices, the newest high speed standard for wireless computing. Apple is charging $1.99 for the patch.

Is this just an excuse to charge people for something they already paid for? Apple says no and logic seems to bear this out. This fee will effect about 1 million Macs sold during the last quarter or so that contain the newest wireless chip. Thus Apple stands to make $2 million. Not a lot of money for a company that earned $1 Billion net profit in the last quarter. Apple claims that Sarbanes-Oxley's change to GAAP requires them to charge for a significant enhancement to a product they have already sold. Otherwise, they couldn't have recognized the full amount of the revenue earned from the previous sales.

So the end result is that everyone who bought a Mac in the last few months have to pay $1.99 to unlock the power of something they already bought or pay $179 for an Airport Extreme Base Station that includes the software patch in its price.

So, is Apple's accounting now more transparent or the consumers are just getting screwed, again?