Even as I was asking, The Financial Times was offering an article documenting woes in the wake of the Sarbanes-Oxley of 2002 (access requires subscription).
It seems that the more obvious demands imposed by Sarbanes-Oxley in financial accounting - the expense, the time investment, the extra audits - are just the tip of the iceberg. The required mix of "proper" business controls and personal liability is causing a chain reaction that affects boards, organisational structures, professional advisers and the daily efficiencies of all public companies - and many private ones, even though technically they are not covered by the act.
The results are having an impact on the way companies hire, structure their organisations, work with lawyers and accounting firms and even choose software systems. They are also driving higher-than-anticipated expenditure in unexpected areas...
Sarbanes-Oxley has also forced a change in companies' relationships with auditors and lawyers. "What it has done is made your outside accountants regulators," says Anthony Abbate, president and chief executive officer of Interchange Bank, a New Jersey-based finance house, and an outgoing member of the Federal Reserve Board.
In the past, he or his chief financial officer could ask an auditor for an opinion on a proposal. Now, he says, "they don't even want to hear about what you're doing. If they say, 'Yes, you can do it,' or they remain silent, they become complicit and subject to their own regulatory body. So you're basically flying on your own."
It appears that not even the "going dark" option is a full solution.
With companies coming to realise the knock-on effects of Sarbanes-Oxley, some are busily trying to jump ship by going private. But in the long run, that will not be a solution.
For a start, private companies such as Wise Metals Group, a Baltimore-based producer of aluminium cans, have become subject to the same tough regulation since starting to offer public bonds...
Private-company status is also no haven from Sarbanes-Oxley. If a private company wants to leave open the possibility of an acquisition, particularly by a public company, it will probably have to show that it is compliant with Sarbanes-Oxley.
The article does note some unexpected positive aspects of Sarbanes-Oxley, but even these might be filed in the category of "creative destruction":
But if there are unintended consequences, they are not all negative. Mr [Michael] Critelli [chief executive of Pitney Bowes] found that the regulation could be used as a tool to force changes he wanted to make at Pitney Bowes - such as increasing shared services. "It turned out to be a blessing," he says.
Combine this with the post-recession oil shocks, and it's almost a wonder that the U.S. economy has done as well as it has.