The Finch Formerly Known As Gold

21 May 2005

The wonderful world of financial minutiae

Requirements of the Sarbanes-Oxley Act are viewed as onerous by some corporate officers, and, says CT, that's just too bad:

I find it amusing to hear all the grousing over a law that requires nothing more than simple accountability. That the extra work drives CFOs to distraction (and in the case of Outback Steakhouse's Bob Merritt, resignation from his job) elicits no sympathy from me at all. These companies are more than happy to reap the rewards of being a public company — huge cash reserves, leveraged borrowing, etc. — but ask them to pay for those advantages by lifting the veil from their financial books, and they have a fit.

I have my own issues with Sarbanes-Oxley, mostly philosophical: as Mindles H. Dreck points out, the regulatory trend is toward "giving up on the idea of strict prescriptive guidelines of behavior in favor of both subjective guidelines and creating a paper trail for litigators," and while paper trails have their value, subjective guidelines are worrisome.

Still, this doesn't mean that there should be no regulations at all. Corporations are synthetic constructs chartered by the states, and the states, at least, seldom make any unreasonable demands on them. Wall Street complains that a few bad apples brought this upon them, which merely shows how out of touch they are with apple-pickers, who know that the bad ones can show up in any section of the bushel at any time.

And if it's so bloody necessary to keep pesky investors and such out of your books, then take the company private and shut the hell up.

Posted at 11:21 AM to Dyssynergy