Is Lehman a Sarbanes-Oxely Failure?

 “The point of regulation is to increase transparency. You can call it regulation, but you’re just shining a light on a murky opaque process that, most recently, brought this economy down” (Michael Oxley, Sarbanes-Oxley Act of 2002, Fortune, March 24, 2010). 

“If you read any of the books that have come out, from Hank Paulson’s book [On the Brink] to Too Big to Fail, the common thread is an incredible lack of transparency and no accountability.”

The reality is corporate management is hesitant to allow employees to tell the whole truth.

Is it possible to ever close the loopholes in transparency? Unequivocally, Yes!

Recent studies indicate that employees find more corporate fraud than regulators (Adair Morse, assistant professor of finance at the University of Chicago’s Booth School of Business).

One viable means to find out what’s really going on inside a company is to improve internal transparency with reporting via an independent third party.

Improved internal transparency from an independent third party provides investors with comprehensive information about the quality of the business and strength of the management team.  The information would serve as a check and balance against the information currently disclosed by management as well as auditors and outside consultants.

A sample report from an online service provider is available at http://www.zethics.com/investors.php.

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About zethics
CEO and founder of zEthics, Inc. Thirty years of experience with finance and accounting background in public private sectors.

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