OVERREGULATION AND SARBANES-OXLEY: A COSTLY LAW
July 27, 2005
The United States should follow the British in the war on overregulation, says Edwin Feulner of the Heritage Foundation. Consider the Sarbanes-Oxley Act. It was supposed to protect investors, but instead, it will end up costing billions, says Feulner.
- A survey of 217 companies showed that they will pay an average of $4.36 million to comply with the new accounting standards, far more than the $3.14 million they expected to pay; and the bill will only get larger.
- An e-mail security company estimates businesses will pay more than $4 billion to articles e-mails (as required by Sarbanes-Oxley) in 2009.
- This cost will be passed on to shareholders and customers who will pay for the protection the new law is supposed to provide.
- Moreover, Sarbanes-Oxley has increased business for accountants and auditors, who were thought to be at fault in the original scandals.
To protect Great Britain from overregulation, Blair suggests:
- Instead of a knee-jerk reaction to a problem or scandal, the country will reflect first and regulate only after reflection.
- Rolling back the regulatory state, especially in the European Union; this will make sure cost assessments are finished before new regulations are put into place.
Source: Ed Feulner, "Overregulation: Where Scandal Really Adds Up," Investor's Business Daily, July 26, 2005.
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