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Conclusions about CRA and Dodd-Frank

The success or failure of the Dodd-Frank Act will be ultimately judged by history and the impact that it has with combatting some of the problems that have existed with credit rating agencies both before and after the financial crisis of 2008. Already critics have been quick to condemn the act for the perceived over […]

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Consequences for Non-Compliance of Dodd-Frank

Consequences for Non-Compliance of the Law Along with the increased responsibility placed on the credit rating agencies, there are also harsher consequences if they are not compliant with the Dodd-Frank Act. Part of the legislation includes standards and new liabilities for the credit rating agencies. First, there are harsher penalties under the 1934 Securities and […]

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Rules for Credit Rating Agencies

Additional Rules for Credit Rating Agencies Under the Dodd-Frank Act The Dodd-Frank Act also has some new rules for the credit rating agencies themselves with the goal of having better corporate governance and maintaining better internal control. First, the Act places more stringent requirements on the company’s board of directors and institutes are requirement for […]

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Conflicts of Interest and Credit Rating Agencies

Effects of the Dodd-Frank Act on Conflicts of Interest In addition to administering rating and disclosure rules, The Dodd-Frank Act also imposes several requirements on NRSROs to establish internal control systems that prevents conflicts of interest. The bill’s drafters made it a priority to put certain guidelines in place in order to mitigate the temptation […]

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Dodd-Frank and Credit Rating Agencies

Addressing Credit Rating Agencies Through Enactment of Dodd-Frank The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was passed and signed into on July 21, 2010.  A small part of this act addressed credit rating agencies and their past practices.  The act intends to (1) remove references in statutes and regulations to Nationally […]

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How to Prevent Corporate Fraud

This is the fourth part in my series discussing corporate fraud. For more on this topic please read On Corporate Fraud Government Response to Corporate Fraud Types of Fraud Ultimately, all institutions should have a comprehensive fraud prevention program tailored to meet the needs of the organization. Fraud prevention programs should also include three prongs […]

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Types of Fraud

However, financial statement manipulation is simply on the edge of the fraud landscape. Much more common are asset misappropriations. The three basic types of asset misappropriations are skimming, larceny and fraudulent disbursements. Skimming and larceny occur when cash is taken directly from the employer, the difference between the two being that skimming occurs before the […]

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Government Response to Corporate Fraud

I next want to discuss the history of the governmental response and the more noteworthy commentary on corporate culture in the last thirty years. Although measures to prevent corporate crime were in effect before the 1980s, one of the more sufficient events was the formation of COSO in 1985. COSO is the Committee of Sponsoring […]

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On Corporate Fraud

Corporate fraud has always been one of the scourges of civilized society, although in the past decade we have witnessed unprecedented levels of greed in corporate culture. The past decade has been marred by Enron, WorldCom, Adelphia and many others, as fraud shrinks our economy by approximately six percent. Watchful eyes cannot be everywhere at […]

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