So Now He Tells Us: Alan Greenspan Doesn't Like Sarbanes-Oxley
from the thanks-for-nothing dept
Despite the major financial scandals from a few years ago, embodied most famously by the collapse of Enron, there's good reason to think that the resulting Sarbanes-Oxley regulation was a poor response to the problem that ultimately had the effect of making the US a worse place to do business. Apparently, ex-Federal Reserve Chairman Alan Greenspan agrees, calling parts of the bill a "nightmare". He also said some interesting things about the nature of financial reporting, noting that it was something of an art form, which makes it hard to believe that we'll ever have real-time financial reporting. Greenspan added that he's optimistic that certain parts of the law will be changed, noting that some of the incoming Democratic leadership are open to the idea. It's good to hear him speaking up, but we wonder why he waited until he was out of office to let his opinions be known. Perhaps at the time he didn't feel it was his place to talk about it, or maybe it's just a matter of now having some hindight. Unfortunately, it's always easier to get things passed than to get them repealed.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
How stupid are the people running governments anyway? Is there a cap on SAT scores for them?
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
one good thing came out of it...
[ link to this | view in chronology ]
Re: one good thing came out of it...
[ link to this | view in chronology ]
Re: Re: one good thing came out of it...
Remember, we are at war. Without rubber stamp legislation the terrorists win.
[ link to this | view in chronology ]
Re: Re: Re: one good thing came out of it...
Well it is debatable exactly how much SOX costs now and I don't claim to understand it all. I got out of managerial accounting with an A but I crammed like hell for it and pretty much forgot it after I got out of there. But, I think there is more concern for the smaller companies. Compliance is not cheap by a long shot, and has greatly outpaced its benefits over the last few years. Basically, a company has assets to turn into income and liabilities that generate expenses. SOX is the cost of doing business and so far companies are struggling to offset that cost. Independent audits and reviews, consulting, and other levels of redundancy I think it a bit excessive. It is needed? Sadly yes but it desperately needs some reform.
[ link to this | view in chronology ]
Re: one good thing came out of it...
#2 With all the outsourcing most of the jobs created were created overseas by the bean counters.
[ link to this | view in chronology ]
Fraud
Most such frauds have at their root: middle management trapped between what is demanded of them and what they can actually deliver combined with a corporate culture which enables fraud. Corporate frauds usually start small as a temporary fix and then snowball out of control over time as bigger and bigger fixes are needed to keep the lie going.
Maybe what we need is to have auditors complete a standard fraud questionnaire as part of the audit - you know - have you booked revenue that you have not earned - have you refinanced bad or doubtful debts - fully disclose all transactions with persons affiliated with the company - etc.
[ link to this | view in chronology ]
It is here to protect us
[ link to this | view in chronology ]
Joe Smith
SOX came about because senior leadership created layers of management and compliance positions so they would have someone to blame. SOX requires senior leadership to actually be accountable for the books. Now they can no longer get away with saying "I didn't know" The penaltys for improper oversight are just about as harsh as commiting fraud. Thats because senior executives make it very difficult to actually prove things, everyone knows they did it, but they can't prove it. Thats where improper oversight comes in.
SOX's goal is to give the market confidence in buying stocks. If that fails, what is the cost of that? Examples like Enron really strike at the foundation of Wall Street, without confidence, the whole market is at risk.
[ link to this | view in chronology ]
Bush
The problem is that of the people that _could_ be elected, he was the least bad. The same was true of this election--and probably will be true of the presidental election [and all of those below] in 2008.
The only way I could make my hand move to vote for Bush was to look at the alternatives. When we have people who are only bad it will be much easier. But our choice seems to be between "terrible" and "even worse".
[ link to this | view in chronology ]
edit... what?!
If you have EVER followed Greenspan you'll find a few things to be true:
- The slightest facial twitch sent markets in 0.5% moves.
- People reacted to even the most watered down statements from Greenspan.
- Greenspan was extremely careful on what he commented on, how he did it, etc.
That he is more forthcoming now that he is out of office, is not surprising in the least.
I don't know why you guys are making comments like these. It seems to display a lack of understanding, knowledge and analytical activities.
I won't be back.
[ link to this | view in chronology ]