<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>privateSFacct</author><text>SOX was 2003 - and after it was implemented a bunch of folks nearly took down the world economy all while saying they complied with both SOX and the &amp;quot;highest ethical standards&amp;quot;.&lt;p&gt;The folks who wanted to take down the country faced almost NO consequence and SOX did little to prevent it. Seriously - thousands of companies jump through regulatory hoops - and the aggressive players get off with nothing.&lt;p&gt;There are lots of people (most people) working to do the RIGHT thing. It&amp;#x27;s SUPER annoying to have people put in huge efforts to get a bunch of small things right, and then to have goverment totally fail to enforce truly 101 big things.&lt;p&gt;I would trade out some of the stuff that 4,000 companies and 100,000&amp;#x27;s of individual have to jump through for even 100 companies getting some actual enforcement action. Everything from IRS audit to anything else you can think of, just at least make there be some consequence for the 101 style abuse of the systems.&lt;p&gt;Even auditing another 10,000 individuals, 200 additional executives - the number of folks putting money offshore - with full disclosure now available through leaked documents and information sharing, there should be 1000&amp;#x27;s of cases to chase this stuff down, not just voluntary disclosure programs.</text><parent_chain><item><author>tabtab</author><text>Most such rules are in place because slimebags abused the system, and in some cases taking the world economy with it. I&amp;#x27;m all for making more efficient auditing rules, but one has to be careful not the throw the baby out with the bathwater.&lt;p&gt;Perhaps have compliance tiers such that smaller co&amp;#x27;s can optionally be in a riskier and less audited stock system or level. However, we probably don&amp;#x27;t want too much of the economy in that pool.&lt;p&gt;As it is, private investors may be willing to take on riskier and even dodgier companies who don&amp;#x27;t want auditors snooping around. That&amp;#x27;s fine: if the rich want to gamble with dodgy companies via private investment, go for it.</text></item><item><author>privateSFacct</author><text>Posting anonymously. Some quick factors not discussed.&lt;p&gt;1) Massive compliance overhead. Going public and maintaining public status can be a real nightmare.&lt;p&gt;For example staff generally &amp;quot;get&amp;quot; what a financial statement audit is about - are the numbers correct. And when they aren&amp;#x27;t everyone gets that a system should be improved. And the auditor makes some notes about areas to improve based on their work, and the difficulty and errors noted in checking the actual numbers. This is the audit most private companies go through - and it actually works pretty well.&lt;p&gt;A public company under SOX - now you have an audit of the numbers (great) and you have a kind of meta audit of the system (internal control) that got to those numbers (ugh). The cost &amp;#x2F; benefit of this second part is not clear to most staff. It&amp;#x27;s huge checklists, everyone get&amp;#x27;s checklist fatigue, and no one dares change a system after the auditors have been through etc. You literally can ask, why in the world do we do crazy procedures X&amp;#x2F;Y&amp;#x2F;Z? Because the auditors accepted it and we are too scared to change it. All critical thinking goes out the window. And folks start driving workarounds to the systems to get stuff done (double ugh and big actual risks).&lt;p&gt;Read some PCAOB reports for &amp;quot;audit failures&amp;quot;. These aren&amp;#x27;t actual &amp;quot;audit failures&amp;quot; - no numbers were wrong. But it&amp;#x27;ll be things like - the auditor read over the calculations, checked underlying documents, recalculated numbers sat in on some meetings, but STILL didn&amp;#x27;t do enough to assess internal control over some calculation.&lt;p&gt;OK - I&amp;#x27;ll save the rest for later, but the idea that the private markets are the new public markets rings true to me. These are folks who can weigh actual cost &amp;#x2F; benefit of compliance cost vs losing money on an investment. Most are going to stick to something like a regular audit. Multiply by 100x in every dimension?</text></item></parent_chain></comment><story><title>US startups don’t want to go public anymore</title><url>https://qz.com/1192972/us-startups-are-shunning-ipos-thats-bad-news-for-americans/</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>jeffbax</author><text>Rules being in place don&amp;#x27;t mean they&amp;#x27;re effective, having the desired outcome, or not causing other adverse effects.&lt;p&gt;&amp;gt; The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.&lt;p&gt;Tends to ring true more often than not.</text><parent_chain><item><author>tabtab</author><text>Most such rules are in place because slimebags abused the system, and in some cases taking the world economy with it. I&amp;#x27;m all for making more efficient auditing rules, but one has to be careful not the throw the baby out with the bathwater.&lt;p&gt;Perhaps have compliance tiers such that smaller co&amp;#x27;s can optionally be in a riskier and less audited stock system or level. However, we probably don&amp;#x27;t want too much of the economy in that pool.&lt;p&gt;As it is, private investors may be willing to take on riskier and even dodgier companies who don&amp;#x27;t want auditors snooping around. That&amp;#x27;s fine: if the rich want to gamble with dodgy companies via private investment, go for it.</text></item><item><author>privateSFacct</author><text>Posting anonymously. Some quick factors not discussed.&lt;p&gt;1) Massive compliance overhead. Going public and maintaining public status can be a real nightmare.&lt;p&gt;For example staff generally &amp;quot;get&amp;quot; what a financial statement audit is about - are the numbers correct. And when they aren&amp;#x27;t everyone gets that a system should be improved. And the auditor makes some notes about areas to improve based on their work, and the difficulty and errors noted in checking the actual numbers. This is the audit most private companies go through - and it actually works pretty well.&lt;p&gt;A public company under SOX - now you have an audit of the numbers (great) and you have a kind of meta audit of the system (internal control) that got to those numbers (ugh). The cost &amp;#x2F; benefit of this second part is not clear to most staff. It&amp;#x27;s huge checklists, everyone get&amp;#x27;s checklist fatigue, and no one dares change a system after the auditors have been through etc. You literally can ask, why in the world do we do crazy procedures X&amp;#x2F;Y&amp;#x2F;Z? Because the auditors accepted it and we are too scared to change it. All critical thinking goes out the window. And folks start driving workarounds to the systems to get stuff done (double ugh and big actual risks).&lt;p&gt;Read some PCAOB reports for &amp;quot;audit failures&amp;quot;. These aren&amp;#x27;t actual &amp;quot;audit failures&amp;quot; - no numbers were wrong. But it&amp;#x27;ll be things like - the auditor read over the calculations, checked underlying documents, recalculated numbers sat in on some meetings, but STILL didn&amp;#x27;t do enough to assess internal control over some calculation.&lt;p&gt;OK - I&amp;#x27;ll save the rest for later, but the idea that the private markets are the new public markets rings true to me. These are folks who can weigh actual cost &amp;#x2F; benefit of compliance cost vs losing money on an investment. Most are going to stick to something like a regular audit. Multiply by 100x in every dimension?</text></item></parent_chain></comment><story><title>US startups don’t want to go public anymore</title><url>https://qz.com/1192972/us-startups-are-shunning-ipos-thats-bad-news-for-americans/</url></story>