Friday, October 06, 2006

Warning to Business: We require better education for accountants and auditors, more independent audits, and better barriers to white-collar crime

I recently told five audiences in Bowling Green, Ohio and Toledo, Ohio that white collar crime can be just as brutal as violent crime.

White collar crime inflicts a collective harm on society that does not affect only the companies that were defrauded. It affects the integrity of our financial markets, raises the cost of capital and debt, causes unemployment, and is a cancer on capitalism.

Michael Chertoff who prosecuted the Crazy Eddie criminal case called Eddie Antar the "Darth Vader of Capitalism." White collar criminals are economic predators and are the scum of our free market capitalist economic system.

An article entitled, “In BGSU talk, 'Crazy Eddie' figure backs better audits” written by Homer Brickey in the Toledo Blade published on October 5, 2006 said in part:

This week Antar is telling four Toledo-area audiences the business world needs better education for accountants and auditors, more independent audits, and better barriers to white-collar crime. The four-year-old Sarbanes-Oxley Act, intended to clean up corporate fraud, is just a beginning, he said.

"Our capitalistic system depends on the integrity of financial information," Antar told a classroom of graduate accounting students at Bowling Green State University yesterday. But, he cautioned them: "The word 'trust' is no longer in the dictionary. [For you] it's a professional hazard."

And he warned them they'd better be prepared to detect frauds committed by "the scum of the scum, like me."

Antar, 49, former chief financial officer of electronics-retailer Crazy Eddie and now a convicted felon, told The Blade, "The entire [accounting] profession is not being properly trained to detect white-collar crime."

Fewer than a third of 1,000 colleges offering accounting majors have fraud-detection courses, although BGSU does, and too few students are required to take the ones that are offered, he said. He planned to encourage members of the area chapter of Financial Executives International to go beyond requirements in
Sarbanes-Oxley, imposing more stringent internal controls to ensure that no more disasters like Enron and WorldCom occur.

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