I was recently interviewed for an article in Financial Executive Magazine. The article contained comments from a variety of executives, educators and consultants. We were asked to speculate on the future of financial reporting and the finance function in corporations.<\/p>\n
Naturally, my comments pertained to fraud and how that may impact the finance function.<\/p>\n
Tracy L. Coenen, a principal in Sequence Inc. in Milwaukee, has spent the 10 past years in forensic accounting. A CPA and certified fraud examiner, she has a somewhat jaundiced view of companies’ current and prospective anti-fraud efforts. “Until companies admit that fraud may have an impact on them, that won’t change,” she says. “A common estimate is that fraud represents 5 percent of revenues each year . and a lot of companies don’t think that’s material to them.”<\/p>\n
Coenen agrees that “some of the better companies” have used Sarbanes-Oxley compliance to fix some of their internal controls. But, in an ominous thought for the future, she adds, “Some simply did the documentation they were required to do; they didn’t use to effort to improve the [financial reporting] process.”<\/p>\n
But Coenen doesn’t think the answer is future regulation, and doesn’t favor “a lot of legislation; I’d rather see companies be proactive about it.” She believes that companies “could do a lot more to act on risk; they are not taking preventive measures. They don’t make it a top priority. Companies think their controls are better than they really are.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
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