Well of course I went to see “Wall Street: Money Never Sleeps” this weekend. I’m the editor of a magazine that writes about securities regulation and ethical business conduct. How could I not go see it?

Unfortunately, watching the film was a hardship assignment. It’s awful. The plot is a dull morality play, pinned to the background of a financial crisis that the director, Oliver Stone, didn’t really understand. You can’t hold that against him too much; nobody else really understands how the financial crisis happened either. But Stone fills the film with caricatures rather than characters, who spout tinny platitudes (“No matter how much money you make, you’ll never be rich!”) and hackneyed references to the financial meltdown (“You know those subprimes you’re selling are crap.”) For anyone with even a modest understanding of modern Wall Street, you feel like Stone didn’t even care whether history fit well with the message he was so eager to deliver—he just wanted to deliver his message.

In short, Stone wanted to force his simple solution onto a complex problem. And it didn’t work.

I see that tension appearing in the regulatory world quite a lot lately. For example, in our latest Compliance Week editorial roundtable, we gathered 11 compliance executives to talk about corporate disclosure—and boy, were they an unhappy bunch. Everyone complained that disclosure requirements have gotten entirely out of hand, to the point that they defeat their very purpose: companies must disclose so many facts, conditions, risks and footnotes, that investors are overwhelmed and nobody reads the stuff any more.

One frustrated roundtable participant summed up the problem as follows: “You want to know why we have so much disclosure about executive pay? Because it’s against the law to pay CEOs nothing when we’re angry at them. But we can’t do that, so we have all this disclosure to embarrass them into taking less pay. This is social engineering by disclosure.”

That person is exactly right. Everyone in the United States has a sense that CEOs earn too much money, and we want them to be paid less. That is our simple solution. Unfortunately, the problem of achieving less pay is enormously complex. We could give CEOs less cash and more equity, but that tempts them to goose up stock prices. We could impose a surtax on high cash salaries, but that immediately inflates salaries to just below the surtax threshold. We could try any number of tactics—and we have—and another unintended consequence emerges, so we add yet another disclosure. This is how complexity happens.

Let’s broaden the lens a bit. Another topic of discussion at the editorial roundtable was the convergence of U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. Supporters of convergence have long praised IFRS as one of those sleek “principles-based” systems, where corporations can make more judgments about what to include in financial reports—unlike nasty old GAAP, a rules-based system that dictates your every move, and hence is 100 times more complex.

In truth, convergence with IFRS will be hair-raising on several levels. First, the sheer rewriting of GAAP rules to match IFRS—which theoretically will be completed within the next 12 months—will make most accounting departments feel like they’ve been sucked into a tornado. Second, there is this foolish notion out there that you can make a judgment under a principles-based system, and people who are unhappy with that judgment will grumble for a while and then move on.

Folks, this is America. Nobody accepts an unwanted outcome and moves on. We appeal, or file a lawsuit, or form a working group, or whatever—but we keep pushing for clarity on our specific question, until all fears are quelled that somebody else might file a lawsuit against us. That is where the complexity in U.S. GAAP came from, and it is what IFRS inevitably will migrate towards, sooner or later. IFRS already has a body, the International Financial Reporting Interpretations Committee, that gives specific guidance on IFRS principles—and thus adds complexity.

I don’t know how we can master complex problems such as executive pay or corporate disclosure or financial crises. But simple solutions, despite all their allure, usually aren’t it.

And as for Oliver Stone—if he wanted a simple solution, he should have let Woody Allen make the movie. There’s a director who knows how to handle a morality play.

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