Former SEC Chief Accountant: Systemic Problems Need Fixing

Lynn Turner says there's still arrogance in the public business world, more should be spent on enforcement, and higher education accounting should be taught in a framework of making ethical decisions.

Sarbanes-Oxley and SAS 99 may help cleanse some firms and make CFEs' jobs easier but little has changed -- unethical, arrogant companies still try to beat the system. So says Lynn Turner, CPA, the former chief accountant for the U.S. Securities and Exchange Commission (SEC) during the height of the major accounting scandals -- 1998 to 2001.

Since he left the SEC, Sarbanes Oxley and SAS 99 forced dramatic changes in the way companies and their auditors do business. Some parts of the new rules make the CFE's job much easier. The penalties for document destruction and the more restrictive definition of materiality are two examples. "But fraud professionals work in a shifting tide," says Turner. "Despite all the changes we still continue to see a record number of restatements. Even with the certification requirement and stiff penalties we still see people lacking the ethical foundation to comply with the rules," he says.