This refers to the Sarbanes-Oxley bill that came in the aftermath of the Enron debacle. While the intent of SarbOx was to help prevent another Enron and the economic damage that went with it, it has in itself created all kinds of harm to businesses because of its draconian requirements.
Accounting and reporting requirements have added to business costs with nothing to show for it. SarbOx fixed nothing. Even if it had been in force before the Enron debacle, it wouldn't have prevented it.
Some of the side effects of SarbOx:
So it all boils down to this: SarbOx costs businesses billions in compliance costs, delays up-to-date financial reporting, has squeezed out investment capital, and cost jobs (except those of accountants). Yet with all it was supposed to do it hasn't prevented much of anything that existing SEC rules and regulations already covered. It wasn't that there weren't sufficient laws on the books to deal with things like the Enron scam. It was that what laws that were already on the books weren't being properly enforced. How does piling on even more laws, rules, and regulations fix that?
A decline in IPOs (Initial Public Offerings). This is how private companies go public, offering stock to the public as a means to raise capital for expansion. Without this mechanism, many businesses can't expand as they might have planned, which means fewer jobs are created and less money can be made.
An increase in mergers and acquisitions because IPOs have fallen out of favor due to the requirements of SarbOx.
An increase in number of public companies going private. Some of this may be driven by the burden placed upon public companies by SarbOx. Going private removed much of this burden, but also made it more difficult to raise capital. Apparently they saw this as less encumbering than having to deal with SarbOx.
It slows down speedy financial disclosure, something the SEC requires. With the convoluted requirements of SarbOx, such disclosure is darn near impossible.
Costs of compliance are quite high. The SEC had estimated it would cost companies required to report under SarbOx only $91,000 per year to do so. The actual costs are closer to $7.8 million per year (this is a 2008 figure). Accounting costs have doubled due to the reporting requirements. Other than accountants and attorneys, how has this benefited anyone?
Unfortunately we're all paying the price for that lack of oversight and enforcement.