James Thyen, CEO and president of Kimball International Inc., knows firsthand that compliance with the Sarbanes-Oxley Act's Section 404 does not come cheap. In the year and a half since Kimball began making modifications and preparing for its internal controls assessment, the $1.15 billion global manufacturer of furniture and electronics, based in Jasper, Ind., has had to spend at the rate of $1 million a year on additional costs from such items

as markedly higher audit fees, expanded staffing and the like.

Now, Thyen, who basically would describe himself as a supporter of Sarbanes-Oxley, has only one question for the federal government: Is all this necessary–particularly for midsize companies like Kimball? "We believe Sarbanes-Oxley has many positive aspects to it. It's going to make us stronger as a country [and] as a company," says Thyen. "But at the same time, the legislation that was passed with such exuberance was a reaction to [the actions of] a few, and the danger of proportionality is that it brings unintended consequences that end up actually working against the American investor and working against capital markets."

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