SmartLogik Action Group

Opportunity for Corporate Fraud Has Shrunk — but It’s Still There (Washington Post)

January 26th, 2006

Opportunity for Corporate Fraud Has Shrunk - but It’s Still There (Washington Post)

Four years after the collapse of Enron Corp. spurred the most sweeping revisions in business regulation since the Great Depression, experts warn that the ingredients for a similar financial disaster remain.

Despite new laws and regulations, companies still face enormous pressure to meet short-term financial goals, creating a powerful motive for accounting fraud. Outsized executive compensation grows by the year, offering another rich incentive to cook the books. And there is no certainty that Congress will continue to fund regulatory budgets at current levels.

But some things have changed since December 2001, when Enron’s sudden descent into bankruptcy protection rocked investor confidence and left the markets reeling. Accountants face independent oversight for the first time in 70 years. Most corporate board members take their jobs far more seriously. Wall Street is somewhat less willing to accommodate clients’ interests.

Entry Filed under: Accountability, Accounting, Auditors, Banks, Bondholders, Business malpractice, Class Actions, Compliance, Conflicts of interest, Consumer Rights, Corporate Governance, Creditors, Democracy, Double Standards, Finance, Fraud, Government, Insurance, Intellectual Property, Investment Banks, Kickbacks, Law, Litigation, Mis-selling, Negligence, Pensions and savings, Regulators, Responsibility, Security, Share dealing, Shareholder Rights, SmartLogik Action Group, Stockbroking