• Compliance Week: Koss Embezzlement and Small Company Internal Controls

    Today’s Compliance Week article, “SEC Pursues Small Company Over Lax Internal Controls,” [subscription required] discusses the SEC settlement with Koss Corp over the $34 million embezzlement by former Vice President of Finance Sujata (Sue) Sachdeva. The article explains the settlement, […]

  • Financial Statement Fraud: Olympus Makes It Look Easy

    What is a company to do when it wants to hide losses? Manipulation of the financial statements is the obvious first choice. It’s not hard. Sure companies have “internal controls,” which are supposed to include policies and procedures which ensure […]

  • Groupon IPO: Investors Beware the Unaudited Financial Statements

    It’s crunch time for Groupon (GRPN). The roadshow for the company’s Initial Public Offering went live last week, and Groupon’s offering will happen this week. Demand for the shares is apparently through the roof. The company was hoping to sell 30 […]

  • Green Mountain Coffee: Accounting Irregularities and Other Concerns

    A couple of weeks ago, David Einhorn bashed Green Mountain Coffee Roasters (NASDAQ:GMCR) in a 110-slide presentation called “GAAP-uccino” at the Value Investing Conference, sending the company’s shares down. The stock opened at $91.66, and closed at $82.50 the day […]

  • Exposing Auditors’ Work

    Lately, there has been talk of more requirements for auditors:  more disclosures, more discussion, more information on who is doing the audits.  Would a narrative by the auditors add more meaning to audit reports? One problem with audits is that […]

  • Whistleblower Complaints: Fast Action Required

    Recently I wrote about an internal investigation I did for a company which received a whistleblower complaint, sent to executives, the board of directors, and the Securities and Exchange Commission. Upon receiving notification that allegations of fraud were being made […]

  • Groupon: Restated Numbers Reveal Failure of Business

    In July, critics attacked Groupon (GRPN) and it use of a made-up accounting measure management called Adjusted CSOI. I suggested that the company made up the measure to exclude many of the company’s expenses to make the company look more […]

  • SEC Discards Documents Regarding Matters Under Investigation (MUIs) According to Agency Policy

    The big buzz this week is an article in Rolling Stone regarding the SEC’s policy of destroying documents related to Matters Under Investigation (MUIs) which do not result in any agency action being taken. At first blush, it may appear […]

  • Committed to Fraud Prevention

    As regulators focus on corruption crackdowns, companies are turning to compliance committees to help them stay on the right track. Tracy L. Coenen – CFO Magazine Do a Web search for corporate compliance committees, and you’ll get hundreds of thousands […]

  • Dodd-Frank Whistleblower Rule Adopted by SEC Discourages Internal Reporting

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, established a whistleblower incentive program requiring the Securities and Exchange commission to provide monetary awards to whistleblowers who come forward with information about the violation of […]