As much as I’m embarrassed to admit it, I still howl when I see a vignette of the Three Stooges.

Even at my rapidly advancing age, there’s something about the dour-faced Moe using Larry and Curly’s (and later, Shemp’s) respective heads for fungo practice with the nearest hard object (usually a claw hammer or plumber’s wrench) that makes me cackle uncontrollably — much like I did when I was 10.

And when this troika attempted to follow a set of directions either to cook or erect something, that scenario took incompetence to another level.

I’m mentioning my favorite comedic troika only because, had the series aired in 2004 in lieu of 1944, it may have shown these buffoons embroiled in a variety of get-rich-quick investment schemes that mandated them poring over a company’s financial reports.

And this absurd parallel hits closer to home than many of you may think.

Despite the current climate of oversight and calls for greater disclosure, it never ceases to amaze me how many seemingly educated people willingly invest their money in companies they know shockingly little about. Or in many cases, invest on little more than the advice of a friend.

One acquaintance, who not only bears a striking resemblance to the late Curly Howard, but often mimics his bone-headed antics, once threw $10,000 in a small Colorado mining company on the assurances of a man seated next to him one night in a bar. 

Where was this guy when I was selling cars?

He had no idea what to look for when reading such things as 8-Ks, 10-Ks or annual reports and the MD&A to him was simply the 13th, 4th and first letters of the alphabet.

The question of how he even came upon 10 large to invest is a discussion for another time. But unfortunately, his is not an isolated incident when it comes to investor ignorance and the financial illiteracy of many Americans.

Last week, Glass, Lewis & Co., the financial research firm, released a study on what investors should be watching out for — in particular, a change of auditors, among the most frequently overlooked material changes.

Glass Lewis reviewed some 900 8-K forms listing a change of auditors and found that internal control problems were reported at 58 companies, disclosures of accounting disagreements appeared in 27 more, and six auditors resigned outright due to their inability to rely on management representation.

In fact, 115 companies with more than $100 million in revenue changed auditors in 2003.

Perhaps more shocking was that 630 companies didn’t list reasons for a change in auditors, nor are they compelled to, as the Securities and Exchange Commission does not mandate a company to list a specific reason for an auditor change.

But perhaps they should.

To be fair, some auditor changes are predicated on nothing more than fee disputes or Sarbanes-Oxley prohibitions.

But as Glass-Lewis warns, an auditor change should send a warning sign that something may be amiss. It becomes another chapter in helping bolster financial literacy.

If you actually care what happens to your investments, my suggestion is to simply watch the Three Stooges, not imitate their due diligence methods when it comes your future.

Nyuk, nyuk, nyuk.

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