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Deloitte CEO Joe Echevarria on the impact of Sarbanes-Oxley and whether more regulations are needed.
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-- fast but modern day marks the ten year anniversary of sarbanes Oxley of course a law that -- accounting rules for public companies.
We have somebody who says that there's a new way area today the financial regulators are missing.
Joseph at -- -- is the CEO of Deloitte he joins us now in a Fox Business exclusive.
This was pretty widespread -- comprehensive when it came to Starbucks in fact some say -- comprehensive and too detailed but you say there's something missing what is that.
Well if you think about what that was about that was really about financial accounting fraud that took place in the early two thousand's Enron Enron WorldCom etc.
-- what's what the financial crisis was about was more about business model risk and market structure.
Different than that -- -- legislation which was quite effective for dealing with those issues.
So let's look back now it's been ten years servings are actually been -- in existence has -- saved -- cost the economy money.
Well there's no doubt that there's a cost.
Element of regulation the real question will -- cost you guys at Deloitte more money it cost society in general market.
And cost provider of money to terrorism dollars but the real question is -- to create value protection for investors that -- that call did it.
Well I think -- happens the policy making so yes answering that policymakers will say -- it is.
I would say yes from the -- of the guy that was created.
But then again it gets out to a personal choice there's a cost of regulation -- a cost of no regular.
Well level of well absolutely and we can't just let it -- the cowboys going off at the Indians and the sheriff sitting by watching him blowing meant the end of the smoke with a gun I'd like that but.
But I will tell you this that I have heard from more small business guys who say.
It's not worth it for me to go Republican and for that because of sarbanes Oxley it's too expensive they modified some of those rules so that it wouldn't be as expensive.
Was that modifications useful and was at a good fix.
Yes so clearly they scaled sarbanes Oxley Bob mid term may change some of the process to deal with the smaller companies the jobs act also had an exemption and it.
I think if you went back in time one of the things the legislators would have said was issued and made it more scalable from the outset.
So some of that cost issue would be different for large company vs a small a private company went public.
We're now in -- Dodd-Frank.
Is that does that make as sarbanes Oxley look like small point eight it's.
What's a different issue now you're into business risk and valuation market structures and are you really but it's getting into regulation in fact many of the regulations that are implied by Dodd-Frank haven't even been written yet yes and that's that's okay that's -- -- a different set of regulations it was a bit different yes isn't far reaching absolutely.
Time will tell whether it's a -- OK if there are some 1000 plus questions and then 800 more sub questions when it comes to the Volcker Rule.
How as a company where your chest trying to create widgets and sell them and do business in America.
Isn't there -- simpler way and would it be to revert back to sarbanes two Glass-Steagall -- -- Glass-Steagall you know separating investment banking depository bank here you see both sides of that equation right we had it up until the early 99 not believe we had no major drama of financial -- the likes of which we just saw right -- -- so the real question is -- the rules in place -- prevented this or not and that's just to be seen in my view I do think though that the appropriate behavior here is that.
We in business and whoever we lost the trust of the general society in the consumer and that the cost of that it's called regulation.
But our regulations.
Improving that that sense of trust or discouraging.
Well I think in the sarbanes -- absolutely yes but that to the test of time it's ten years later okay Dodd-Frank has yet to be written 80% of the rules and yet -- -- yet to be known whether that's what's that you're saying we have to wait have to wait Joseph thank you thank you don't -- Maria CEO of -- thank you for -- I'm so much for having me get up.
