New Laws, New Challenges: Implications of Sarbanes-Oxley

https://nsuworks.nova.edu/hcbe_facbooks/1161/thumbnail.jp

Are all Audit Committee Financial Experts Created Equally?

There is little extant empirical research that classifies audit committee members based on expertise and independence simultaneously. Additionally, there is little empirical research where different types of gray audit committee members are considered separately. We find disclosure quality (as perceived by financial analysts) is positively related to the percentage of audit committee members who are affiliated with companies providing services to the firm and who are financial experts and negatively related to the percentage of audit committee members who are related to firm executives and who are financial experts. We also find that adding independent audit committee financial experts predates improvements in disclosure quality. As regulators around the world consider implementing audit committee requirements mandated in the United States, our results call into question disqualifying all gray directors from audit committees

Why Good People Do Bad Things At Work

[...]the Sarbanes-Oxley Act of 2002 (SOX) requires that external auditors assess a company\u27s tone at the top as part of its audit of the organization\u27s internal control over financial reporting. In 2019, PPG Industries, Inc., a global supplier of paints and specialty coatings and materials, reached a settlement with the U.S. Securities & Exchange Commission (SEC) over charges that it intentionally manipulated its financial accounting multiple times to improve reported performance. Both of these examples point to the importance of practicing management accountants and other financial professionals, companies, auditors, and regulators focusing on the tune in the middle and the tone at the top when assessing the likelihood of unethical behavior. According to this theory, individuals faced with an ethical dilemma where they need to choose whether to gain a benefit by behaving unethically or to maintain a positive self-image by doing the right thing will find a balance between these two competing motivations

Richard Scrushy: The Rise and Fall of the King of Health Care

It has been said that scammers and swindlers often display characteristics commonly attributed to good leadership. These include setting a vision, communicating it clearly, and motivating others to follow their lead. But when these skills are used by unconscionable people to satisfy greed, how can the average person recognize that foul play is afoot? Providing a unique account of frauds throughout modern history, Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership compiles narratives from around the world, including a number of highly-publicized cases. Leading financial and investigative experts have authored the individual chapters, yet the book maintains a reader-friendly style. The result is a text that is highly engaging and most importantly, provides regulators and investigators with an understanding of the motivations and behavior common to the individuals behind these life-damaging crimes. The book includes a wealth of stories, including famous cases such as Ponzi, ZZZZ Best, Enron, Parmalat, and Vivendi, along with lesser-known scandals involving both corporations and individuals. There is also a section on frauds perpetrated for motives other than financial rewards, including instances when the government performed experiments on humans without their knowledge or consent, as well as stories on frauds involving science and religion. A section detailing the Arthur Anderson debacle discusses the compounding of a fraud when the supposed watchdogplays a complicit role. And recognizing that not every issue is black or white, the book also explores whether a hoax perpetrated in the name of a noble cause can ever be justified. By reviewing the tactics used by swindlers and the motivations that turned good people crooked, investigators and others will come to recognize the red flags that accompany unscrupulous behavior. In doing so, they may well learn how to head off potential disaster.https://nsuworks.nova.edu/hcbe_facbooks/1159/thumbnail.jp

Bloggers: Separating the Wheat from the Chaff

This one-of-a-kind collection consists of actual cases written by fraud examiners out in the field. These cases were hand selected from hundreds of submissions and together form a comprehensive picture of the many types of computer fraud how they are investigated, across industries and throughout the world. Topics included are email fraud, on-line auction fraud, security breaches, counterfeiting, and others.https://nsuworks.nova.edu/hcbe_facbooks/1158/thumbnail.jp

Active Involvement, Familiarity, Framing, and the Illusion of Control During Decision Support System Use

Results of a laboratory experiment on Decision Support System (DSS) use indicated that (a) active involvement in model building and data entry, (b) familiarity with model execution and the decision situation, and (c) consistency between a normative solution and the alternative encouraged by the problem frame led to an illusion of control, defined as an unwarranted inflation in expectations of success. Furthermore, higher expectations of success were associated with greater user satisfaction, better mood, and lower preference for thinking more before making the final decision. Higher expectations of success were less likely to be associated with preference for creating another model but were more likely to be associated with preference for further refinements to the existing DSS model before making the final decision. However, variations in expectations of success induced by sources of illusion of control were not associated with variations in decision performance. Implications for practice and research are presented

See No Evil; Hear No Evil; Speak No Evil: Ernst & Young\u27s Ethical Responsibility for the HealthSouth Fraud

It has been said that scammers and swindlers often display characteristics commonly attributed to good leadership. These include setting a vision, communicating it clearly, and motivating others to follow their lead. But when these skills are used by unconscionable people to satisfy greed, how can the average person recognize that foul play is afoot? Providing a unique account of frauds throughout modern history, Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership compiles narratives from around the world, including a number of highly-publicized cases. Leading financial and investigative experts have authored the individual chapters, yet the book maintains a reader-friendly style. The result is a text that is highly engaging and most importantly, provides regulators and investigators with an understanding of the motivations and behavior common to the individuals behind these life-damaging crimes. The book includes a wealth of stories, including famous cases such as Ponzi, ZZZZ Best, Enron, Parmalat, and Vivendi, along with lesser-known scandals involving both corporations and individuals. There is also a section on frauds perpetrated for motives other than financial rewards, including instances when the government performed experiments on humans without their knowledge or consent, as well as stories on frauds involving science and religion. A section detailing the Arthur Anderson debacle discusses the compounding of a fraud when the supposed watchdogplays a complicit role. And recognizing that not every issue is black or white, the book also explores whether a hoax perpetrated in the name of a noble cause can ever be justified. By reviewing the tactics used by swindlers and the motivations that turned good people crooked, investigators and others will come to recognize the red flags that accompany unscrupulous behavior. In doing so, they may well learn how to head off potential disaster.https://nsuworks.nova.edu/hcbe_facbooks/1160/thumbnail.jp