The speed with which financial transactions can be conducted and money can be moved around the world encourages regulators to establish a global financial infrastructure. Different types of corporate governance structure are exposed to different financial misconduct and scandals. For example, the dispersed ownership system of governance in the United States is prone to earnings management schemes (e.g., Enron, WorldCom), whereas concentrated ownership systems are more vulnerable to the appropriation of private benefits of control (e.g., Parmalat). COVERGENCE needed !!!!!
Antifraud Program and Practices (SOX Sections 302, 404, and 906, PCAOB AS No. 2, PCAOB’s new AS No. 5, discovered fraud should be reported to ICFR ) An effective antifraud program should address corporate culture, control structure, and fraud procedures: 1. Corporate culture—Corporate culture should create an environment that sets an appropriate tone at the top 2. Control structure—An effective control structure should eliminate opportunities for individuals to engage in fraudulent activities. 3. Antifraud procedures—Adequate fraud procedures should be developed and performed to ensure prevention and detection of potential fraud.