SOX, DFA Do Little to Turn Back the Tide on Fraud

Despite the Sarbanes-Oxley Act of 2002 and last year’s passage of the Dodd-Frank Act, business losses due to corporate fraud continue to rise. In addition to traditional forms of fraud, two others have grown in significance: business model fraud and business process fraud. An example of fraud in the business model is touting bundles of worthless subprime mortgages, while an example of fraud in the business process is when companies ignore an environmental law. The culprit? Even with a framework in place, many organizations do not have compliance or risk management oversight.