How to commit financial crimes

A new study, "Control Overrides and Financial Statement Fraud," by the Institute of Fraud Prevention has looked at 834 companies filing restatements and found that it apparently takes teamwork to perpetrate fraud. About 45 percent of the restatements studied resulted in charges of securities fraud by shareholders or the government. The study found that an average of seven people--the CEO, CFO, Chief Operating Officer, general counsel, members of the Board of Directors, and internal and external auditors--were involved in these cases. So what does this mean? Well, even before Sarbanes-Oxley, fraud seems to be something that was rationalized by group-think. Hey, if everybody says it's okay and everybody's doing it, it must be. The options back-dating scandal comes to mind. The issue is whether the same mentality holds today, post Sarbox. My sense is that Sarbox has changed the mentality but perhaps not completely. There will always be those who succumb to temptation. Hopefully, their peers and auditors will make them less comfortable indulging their whim.  

For more:
- here's an article from accountingweb
- here's the study