The basic idea of the story is that Sarbanes-Oxley legislation imposes a crushing financial burden on all publicly-owned companies. Which is true. I was one of the thousands of people employed to deal with it. (Not that I’m complaining.)

SOX legislation, specifically section 404, says that corporate reporting needs to be validated by internal and external auditors. This is good in many ways, and I’ve personally seen a lot of good practices instituted, but you have to remember something. Auditing is just another business. The auditors are there to make money. They’re going to turn your company upside-down to find tiny problems that aren’t really against the spirit of honest capitalism. That’s why it’s a crushing financial burden.

I said it then, and I’ll say it again now – there’s no need to overhaul corporations on account of a few bad eggs. It’s really about common sense. You don’t make up financial numbers, and you don’t lie to the public. Is that really so hard?

Allow me to geek out a moment. Object-oriented programming is a Good Thing because it abstracts out some messy details from other types of languages. Rather than having a function like do-something(with, some, values) you get object-with-state.do-something(another-object). This is important for several reasons:

1. It’s often easier to think about objects and interaction than processes with specific inputs and outputs. For example, you kick a football. It makes more sense to say you kick it [you.kick(football)] than to say there is a kick occurring, with you and the football being primary participants. [kick(you, football)]

2. Objects abstract away ugliness. A lot of things in a program can logically be thought of as objects. Say you’re getting information from the web. The site is an object, the receiving computer is an object, (perhaps the stream is an object) and all these objects interact nicely. Each thing knows how to deal with its own information, each thing can exist alone or it can accept input from others. A football object knows to slightly deform and rocket away when it’s kicked. The kicker doesn’t have to know that. If everything had to do every job, it couldn’t be as efficient. Abstraction creates efficiency.

Object-orientation isn’t a one-size-fits-all solution, but it’s often a godsend.

Duck Typing is a concept from Ruby, or at least it was popularized by Ruby. Type systems in general determine how a language deals with different types of objects or values. Static typing systems bind variables to specific data types, whereas dynamic typing allows a variable’s type to change. Duck typing, on the other hand, doesn’t care what type a variable is – if it responds to certain signals of a type, it is that type. If it walks like a duck and quacks like a duck, it is a duck. (thanks Dave)

Where am I going with all this? These models are a perfect fit for an efficient office.

Each employee is a separate object that knows how to do its own work – it specializes in one area or another. Each object answers to different signals with different responses. These responses are customized towards one type of job, a Class if you will, that other classes can rely on to deliver responses to certain signals. The office workflow is just like a well-structured program:

The main program body (the CEO) contains (hires) various classes (employees) that do specific tasks (positions), and some bit of code to start it all off and organize it (his job). The classes then do their own work and interact with each other, and outside programs, to accomplish the purpose of the program (the company). The classes, being specialized, don’t need to worry about doing everyone else’s job – and because everyone is designated to one thing, this both gives them more time to concentrate and increases efficiency. Return values (TPS reports) flow freely and honestly, and everyone gets exactly the information they want. Information flows through both return values (up) and parameters/objects (down) so no one is excluded. Private class methods (internal security) can still ensure some secrecy where needed. In short, perfect optimization.

What does all this mean? The Programmer Is God. Muahaha… er, no, just that businesses should listen to their programmers more often, and they might just be efficient.

I’ve just spent a week in a six sigma class in which I’m supposed to be impressed by the Master Black Belts, and I worked in a group with one of them. He’s a fraud. If he’s supposed to have ultimate knowledge of six sigma then I weep for six sigma. It has such promise, and yet it’s already being adulterated. It’s been adopted by upper management. They’ve thrown out all the parts involving hard work, the stuff in which you have an in-depth understanding of why and how to do six sigma. If you don’t know why, then you don’t know when to use tools and when not to use tools, and what the tools really mean. It becomes cookbook, where no one is expected to think, just do, action action action, and would you please look this way dear and makeup! get over here and powder her face again she needs to look perfect for this shot.

It becomes a special club where you have to know the right people and play the right golf game to get in, it doesn’t matter how competent you are as long as you’re buddy buddy with your boss’s boss, you’ll move up and get that title of Master Black Belt. Hey, why do the work? Let the computer fill it out for you, let the underlings do it, you’re busy making the high level important decisions. While you’re at it send out another inspiring email about how proud the employees should be to work here, and by the way there still will be no reimbursement for travel below the middle manager level. We all need to make sacrifices!

I’ve deviated from my point. Rushing to flags. While I was at six sigma class all week, my process at work got interfered with. The two messages coming from the program folks are:

1. The parts aren’t good enough
2. we need more of them because we’re going to run out.

Let’s have meetings each day this week, so we can sit around and talk about how busy we are putting out fires and how wounded we are that these parts aren’t good enough and by the way good job we appreciate all your help please send a message to china that they need help because their equipment is shit. Their words, not mine, in case you’re wondering. So let’s go fight the good fight with the manufacturing folks before they start a disaster over the part quality and don’t worry we’ll cover up your mistakes for you.

Then I begin to wonder why these people are even involved, considering they aren’t the internal customer or the internal customer’s boss and they’re supposed to be devoting all their time to a completely different problem. It’s no longer a question why they’re so “busy.” They’re fighting fires. Jumping on whichever project has a “problem” and doing action until a manager notices and says good boy, then they can abandon the project and move on, and if anyone asks they’ll probably say “I was never part of that project. Don’t blame me for your problems!”

My point is that these people are rushing to their flags. Uttering rhetoric as if they’re in a battle, speaking of conflict with other people and organizations and how they have to flex their power within the company to win. It’s rather silly. I see people on several projects squandering their mental energy on how to fight with other organizations and defend their project and save this project and put out that fire and I wanna scream YOU ALL SHUFFLE PAPER! THAT’S ALL ANY OF YOU DO! Some of them come up with useful material despite themselves but most of them spend the day either in a meeting or preparing for another meeting. Paper-shufflers all! I sit in the six sigma class and people introduce themselves, speaking of which organization they represent and how they’re there to help the class along and represent their group and I’m thinking… It’s a class! Sit down, shut up and learn! Where does “representing such-and-such” fit into a classroom?! Why does such-and-such need to be “represented”, and what does that even mean?! Why are you all jumping over your own feet to claim the spotlight in the class and talk about your project which has no meaning to anyone in the room but yourself! AUGGGGHHHH!!

They rush to flags. It’s high school. They think the only way to make their lives meaningful is to dramaticize it. I sit in a lab and I play with rubber. I like it. I don’t need to make it sound as if I single-handedly saved the company and fought battles. If I were them, I would. Rush to the flag, men. Stand behind it. Beat the drum. Destroy the other flags! Defend your tribe against all! We are at war!

And all I see is an annoying group of men arguing over some transparencies.

They’re well-nigh useless.

In case you haven’t heard of it, the Sarbanes-Oxley Act of 2002 (Sarbanes, D-Maryland; Oxley, R-Ohio) was an effort to reduce the corruption in financial reporting in the wake of scandals like Enron, Arthur Andersen, and WorldCom. Companies were hugely inflating their reported assets and hiding information from investors. Now, I’ll grant that this was a problem. Huge companies were screwing investors.

Two side notes:

1. Were they really screwing anyone but the competition? Inflating your value is dishonest, but it isn’t stealing anything from anyone and it doesn’t hurt how much money the investors get.
2. Companies do what they do to make money. It’s the point of capitalism. Is there really a reason that everything should be made public for a public company? Yes, pertinent business information, but we don’t need to know the details about exactly how a company files their data – it’s their job to worry about it, it’s our job to support them with our money if we so choose.

On the face of it, the SOX act was the right decision. It was passed with flying colors. Was it really the right move to make? I submit that it was not.

The essential tenet of SOX is that CEO/CFOs have to certify financial reports regarding profits, internal and external audits, auditor independence, and internal controls related to financial reporting. Basically, they have to say they didn’t fuck up, fuck you, or fuck themselves. The company has to hire people to do internal auditing, hire external auditors to audit the internal auditors, and audit both auditors themselves, signing off on the whole thing.

I work with the internal auditors.

This gives me a somewhat unique perspective into the life of the SOX act within a corporation. I don’t do auditing myself, so I’m not hated, but I get to see both audits going on – not from an employee’s perspective because they hate audits, not from an auditor’s perspective because they hate the company, and not from an outsider’s perspective because they don’t really give a crap.

The problem is the scope. SOX is supposed to be about financial reporting and honesty. This ballooned into corporation-wide nitpicking that’s cost corporations years of time and billions of dollars to deal with. (which I’m not complaining about, because it’s given me a job. Woohoo!) If a company actually just had to follow the SOX Act (which is rather short, when you consider the legalese) they wouldn’t have to change much. A good company would already audit their performance and make reports. Now all public companies have to tear apart their system, which worked just fine before mind you, and put it back together with different parts and screws thrown into the instructions.

My company had to completely restructure virtually every aspect of the business. Not just financial reports. Even tiny business locations having nothing to do with our money were scrambling to reorganize their operations to be “compliant.” It probably set back the actual business by a year or more. I work in the IT sector that had to completely rewrite every one of its policies. How does that make sense? How does that affect our year-end financial reports? Sure, every person goes into the end result of a successful business, but our company was honest before. We never had trouble with finances or investors, our IT was smooth… Sarbanes and Oxley come along and we’re suddenly fuckups. We’ve got external auditors breathing down our necks about things completely unrelated to the business end.

I wouldn’t call SOX a failure as it did cause some companies to implement good policy that might help them out. However, isn’t it the nature of capitalism for the good, well-organized companies to succeed? If we just enforced honest financial reporting, rather than complete overhauls, wouldn’t the good companies naturally come to the top especially if they already had responsible reporting techniques? Forcing everyone to do unnecessary work has put a lot of stress on the large American corporations recently. And yes, it’s the government’s fault.