To be able to ferret out financial fraud, the Securities and Exchange Commission should learn the basics of espionage, a law professor contends.
David M. Katz, CFO.com | US
February 13, 2009
Not the CIA standards in Intelligence finding, but obtain several of the IRS CID Agents to redo the enforcement department like the IRS CID. After all, these same corporations, individuals and shareholders all fear meeting with IRS Auditors and fear being visited with IRS CID Agents. Should not the SEC obtain the same fear from the public corporations, its board, its Chief Executives and management (individually)when they conceed their financial statements are made to meet some Wall Street Analyst profit number? I would not want those follks on my tail looking at financial statements made for that purpose.
Posted by Bob Kinsler | February 16, 2009 10:38 am
No doubt a new method is needed to ferret out white collar fraud. Just like DNA became famous because of the OJ trial and is being used more and more, it is now time to have Congress mandate the use of the polygraph at least once a year on all C level executives of companies subject to SEC reporting; investment advisors subject to SEC reporting; and any others who are subject to the SEC. The polygraph has come a long way and it is time to be proactive. Yes, some persons can game the system but very few. To obtain a gaming license, a person must go through an extensive background check by the gaming commission for that state. However, a person can work in the gaming industry without a license but not hold a position of responsibility. The same would hold for a person wanting to be a C level officer of a public company. That person does not have to take the polygraph, but, if the person does not, then that person cannot be a C level officer or hold any position requiring SEC reporting. Trust is important to restore and nothing will do it faster than using the polygraph and having the SEC frame appropriate questions. This is the only way to catch collusion. The auditors will then be able to focus on where the real weaknesses are when it comes to collusion, fraud, etc.
Posted by John Samore | February 13, 2009 07:48 pm© CFO Publishing Corporation 2009. All rights reserved.