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Sarbanes-Oxley: Difference between revisions
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Initial post-import pass -- tinkering is needed as this is structured too much as a debate over the appropriate role of government.
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(Initial post-import pass -- tinkering is needed as this is structured too much as a debate over the appropriate role of government.) |
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The '''Sarbanes-Oxley Act''' might provide an opportunity for Libertarians to demonstrate how government intervention can lead to a cure that's at least as bad as the disease. In broad terms here is EqualOpportunityCynic's understanding of the chronology: | |||
The Sarbanes-Oxley Act might provide an opportunity for Libertarians to demonstrate how government intervention can lead to a cure that's at least as bad as the disease. In broad terms here is | |||
*A bunch of corporations did some undeniably naughty (and illegal) things: Enron, WorldCom, Tyco, ... | *A bunch of corporations did some undeniably naughty (and illegal) things: Enron, WorldCom, Tyco, ... | ||
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Unfortunately this scheme also involved so many reams of excess documentation that a cottage industry sprang up of compliance consultants. | Unfortunately this scheme also involved so many reams of excess documentation that a cottage industry sprang up of compliance consultants. | ||
== | ==Descent into Ranting== | ||
Now, I'm not really crazy about corporate dishonesty, and I do think that one of the legitimate roles of | Now, I'm not really crazy about corporate dishonesty, and I do think that one of the legitimate roles of government is to referee the free market -- i.e. make sure the actors are all telling the truth. But surely S-O is an example of how '''not''' to react to a serious social problem, at least from what I've seen. | ||
OK, that's my rant for the day. I don't know enough details to really give better-informed opinion. Feel free to edit this and make it factual and NPOV. - | OK, that's my rant for the day. I don't know enough details to really give better-informed opinion. Feel free to edit this and make it factual and NPOV. - EqualOpportunityCynic 14:13, 2 Jun 2005 (PDT) | ||
==Solution== | ==Solution== | ||
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The driving force will probably be insurance companies themselves, which will bond companies against fraudulent financial information, and they will have the maximum incentive to evaluate the credibility of audit and similar services: they can decide what is and isn't a conflict of interest, since they will be bearing the cost of bad decisions, and they will stop suing auditors they don't trust. Absent government, people will quickly learn the difference between bonded and unbonded financial reports, and we'll have effective guarantees of accuracy without government. | The driving force will probably be insurance companies themselves, which will bond companies against fraudulent financial information, and they will have the maximum incentive to evaluate the credibility of audit and similar services: they can decide what is and isn't a conflict of interest, since they will be bearing the cost of bad decisions, and they will stop suing auditors they don't trust. Absent government, people will quickly learn the difference between bonded and unbonded financial reports, and we'll have effective guarantees of accuracy without government. | ||
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