Reactionary Regulation

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WELL-PUBLICIZED BUSINESS scandals often result in the enactment of new government regulation. Policymakers and industry leaders worry that if they do not enact new laws and rules, the public might confuse them with the unethical actors, regardless of whether or not the enacted regulations actually protect consumers in any meaningful way. Thus, worthless or counterproductive regulation usually follows corporate scandals.

Since 1988, the accounting industry has advocated a 30-hour increase in the traditional 120-semester hour baccalaureate degree required to sit for the Uniform Certified Public Accountant exam. Although states initially responded gradually to this push, the Arthur Andersen and Enron scandals changed that dynamic. Now, 45 states have adopted the increase, thus requiring accountants to pursue the …