Companies that are the subjects of Securities and Exchange Commission enforcement actions for financial fraud are more than twice as likely to go bankrupt as those that are not, according a study by Deloitte Forensic Center.
The study analyzed SEC accounting and auditing enforcement releases issued from 2000 to 2007, as well as bankruptcy filings between 2000 and 2005. Bankrupt companies were more than twice as likely to have more than 10 alleged financial statement fraud schemes as non-bankrupt companies. Bankrupt companies were three times more likely to face SEC enforcement actions for fraud.
The study found that the largest proportion of companies issued the enforcement releases was in the consumer business sector, including retail, at 30 percent. Technology, media and telecommunications accounted for 27 percent of the fraud cases, and manufacturing for 16 percent.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access