Which laws are broken in the current cases at issue'
Recently, a number of headline-grabbing cases, such as the accounting
fraud that existed at the Enron Corporation, have highlighted the role of
management at various corporations and in the financial industry, in the
commission of corporate crime. The role of accountants and the major
corporate accounting firms, as well as the chief financial advisors of
corporations and the management personnel whom may or may not be aware of
illegal accounting activities, are now under strict scrutiny by the SEC.
The Securities and Exchange Commission has attempted to become more
vigilant in policing and prosecuting illegal activities in recent years.
(Asarita, 2002). It is illegal for companies to release fraudulent or even
misleading information regarding their company's performance. (Chartier,
2002) However, to a certain extent, these companies state that their
managerial, non-accounting staff must trust' what the expert accountants
sayâ€"after all, that's why the accountants are considered the experts.
However, it is also alleged that managers can pressure their
accountants to release fraudulent information, which is illegal. But it is
difficult to prove that managers or CEOs knew that this information was
fraudulent, or pressured accountants to do so after the fact. Often, the
pressure process is so subtle, the SEC has difficulty knowing who knew
when, and who said what. Thus, a legal Gordian knot results that is
Last year, the number of accounting fraud cases investigated by the
Securities and Exchange Commission jumped forty-one percent, according to
agency data, resulting in tens of millions of dollars in fines upon the
offending companies to settle the charges. This jump is largely
attributed, not simply to more creative forensic accounting techniques in
discovering illegal accounting meas...