The Magazine of Corporate Responsibility

Tag Archive for ‘Accounting’

Corporate Governance Matters: Lessons for Practitioners

Stanford University professor David Larcker says context is critical in the choices that organizations make in designing governance systems and the impact those choices have on executive decision-making and the organization’s performance. “There is no question to us that ‘governance matters,’” he writes. “The fundamental challenge is to understand when and how it matters.”

The “Dark Side” of Independent Board Members

Independent directors have strong incentives to quit a company’s board precisely when they are most needed, creating an economically significant “dark side” affecting future performance, according to an academic study. The study found that in the wake of surprise outside director departures firms have worse stock and accounting performance as well as a greater likelihood of earnings restatements and shareholder lawsuits.

Study: Financial Fraud Often Results in Bankruptcy

The study found that news of an alleged fraud resulted in an average 16.7 percent abnormal stock price decline in the two days surrounding the announcement. Companies engaged in fraud also often experienced bankruptcy, delisting from a stock exchange, or asset sale, and in nine out of ten cases the SEC named the CEO and/or CFO for alleged involvement, the study found.

Enron on Broadway: No Accounting for Bad Behavior

“Enron” the play tries hard to stimulate, dazzle and entertain. The problem is that it tries too hard. In the process it dilutes the authentic drama and power of the story behind Enron the company, a real-life corporate tragedy that really needed no embellishment.

Survey: Executives Expect More Financial Statement Fraud

A survey of 2,100 business professionals found that more than half (56 percent) think more financial statement fraud will be uncovered this year and in 2011, as compared to the last three years. Financial services was expected by most to be the industry with the greatest percentage increase in financial statement fraud alleged by the SEC during 2010.

WellCare Director Resigns, Questions Accounting Oversight

In a rare public display of boardroom in-fighting, a Harvard Business School professor and health care expert resigned from the board of WellCare Health Plans Inc., asserting that the company’s accounting systems were in need of greater oversight and that some board members had conspired to undercut her authority and force her from the board.