Sunday, December 10, 2006
Incredible story in Sunday's NYTimes here on how one company, RentWay made the decision to fully cooperate with the government following discovery of an accounting fraud. The bottom line is that it may have kept the company from being prosecuted criminally and also the main executive who cooperated who was unaware of the fraudulent activity occurring within the company. But the company suffered from trouble within its midst. The best lesson that can be learned from this story, is the importance of having good solid controls in place to detect fraud within one's midst. Having a proper corporate compliance program may assist to avoid the sad consequences of the innocent CEO who detects the fraud and has to deal with how best to handle the matter.
(esp)(w/ a hat tip to John Wesley Hall)