What Sarbanes-Oxley Won't Do

Refco confirms SOX can't prevent high-level fraud.



Ventana QuickTake™

No one should have been surprised that the Sarbanes-Oxley Act was unable to prevent a high-level executive fraud such as the one that led to the recent demise of Refco, a large foreign exchange and commodities broker. While Congress might have thought it could prevent another Enron or Tyco, Refco’s CEO’s ability to disguise and hide $430 million of loans to him by the company confirms that such spectacular frauds are still possible. In practice, the real value of Sarbanes-Oxley Section 404 for shareholders is to materially reduce the risk of other, lower-level fraud and errors, enhance the efficiency of financial processes and increase transparency. However, realizing that potential requires a management team dedicated to maximizing value from complying with the law by applying a total quality management approach to financial processes.

Related Article:

Fixing Sarbanes-Oxley: FRONTlines Forum looks to future of compliance.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm.  By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit www.ventanaresearch.com.

© 2005 Ventana Research

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Email This  | 
Print  | 
RSS
More Insights
Copyright © 2021 UBM Electronics, A UBM company, All rights reserved. Privacy Policy | Terms of Service