SEC to Focus more on Financial Reporting Fraud

According to the Wall Street Journal, the SEC is ready to get back to work looking for financial reporting fraud. After the mortgage meltdown, the article states that the SEC turned its attention to cases related to the financial crisis and took its eye off of fraudulent financial reporting. Interestingly, the article identifies one new tool that the SEC plans to use to identify fraudulent financial statements...

Former Enron CEO Working a Deal to Get out of Prison

Mainstream news sources are saying that Jeffrey Skilling, former Enron CEO, is working a deal to cut his prison sentence by more than a decade. The reports say that...

Is Fraud Committed by a Spiritual Advisor and an Accountant One and the Same?

Yes according to the Manhattan district attorney who prosecuted a fortune teller for committing fraud. Here's a quote from the NY Times:

“Larceny is larceny, no matter what form it takes,” Cyrus R. Vance Jr., the Manhattan district attorney, said in a statement. “Fraud by a spiritual adviser is no different than fraud committed by an attorney, an accountant or any other person who gains an individual’s trust in order to steal from him or her.”

If you are interested in what this fortune teller did, I'd check out the short article on the NY Times... I personally think the commonalities in various forms of fraud (such as gaining trust) are informative.

Ernst & Young Corruption Survey Results

Ernst and Young surveyed over 3,000 employees from 36 countries in Europe, the Middle East, Africa and India and found that a large percentage are aware of fraud in their organizations. The percentage admitting they knew of fraud seems to increase as you move up the management ladder of the organization. For example, 42% of board members and senior managers admitted to knowing about financial reporting irregularities. Apparently they admitted that either sales or costs had been manipulated...

Before you're tempted to dismiss this as due to corruption in the under developed nations, it turns out that while the rates are much higher in the third world, even highly developed countries in Europe report significant amounts of fraud (including financial reporting fraud) is going on in their companies. My guess is that the US is probably not as good as the best European nations

So much for fairly stated financial statements, not to mention, bribery and other forms of corruption...