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More collusion post Sarbanes Oxley Act of 2002

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Since the Sarbanes-Oxley Act of 2002, fraud from lack of internal controls has gone down. At the same time, collusion between employees and among third parties has increased.

What could be causing this collusion?
How should management address this issue?

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Solution Summary

This solution is 226 words and explains why collusion increased after Sarbanes Oxley Act of 2002.

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When Sarbanes Oxley Act of 2002 was implemented, large public firms had to document and test their controls. And their auditors had to test those tests and given an opinion over whether the internal controls over financial reporting were working. This forced firm who did not have well-designed controls or well-implemented controls to create and monitor ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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