Forensic Center researchers say companies should pay careful attention to their fraud controls as temptations to manipulate numbers appear to rise during times of great financial struggle.
Companies that have filed for bankruptcy protection are three times more likely to face enforcement action by regulators, according to the results of a Deloitte Forensic Center study released today.
The study found that the Securities and Exchange Commission accused 9 percent of bankrupt companies with financial-statement fraud from 2000 to 2007, compared to only 3 percent of non-bankrupt companies that heard from SEC enforcers during the same time. The Deloitte researchers also said companies that the regulator accused of fraud were more than twice as likely to go into bankruptcy as those that did not file for protection.
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