Fixing the System
REGULATORS
Tighten accounting principles to limit wide range of management discretion. Determine whether auditors' expansion into consulting and advisory services leads to conflicts--and if so, restrict it.
AUDITORS
Pass judgment not just on whether numbers meet accepted principles but also whether management is stretching dangerously. Make sure auditors who just say no to clients are rewarded as well as those who bring in new business.
AUDIT COMMITTEES
Stay independent of management. Meet regularly and alone with outside auditors to seek straight answers on internal controls and management integrity.
RELATED ITEMS
 - CORPORATE EARNINGS: WHO CAN YOU TRUST?
- COVER IMAGE: Corporate Earnings: Who Can You Trust?
- EARNINGS HOCUS-POCUS
- TABLE: Accounting Tricks of the Trade
- CHART: Earnings: Now You See 'Em, Now You Don't
- WHERE ARE THE ACCOUNTANTS?
- TABLE: Fixing the System
- WALL STREET'S SPIN GAME
- CHART: The Bull Market in Analysts
- CHART: Sell? Who Said Sell?
- THE SUPERSTAR WHO WEARS TWO HATS
- HELP FOR INVESTORS
- TABLE: Net Assets
- ONLINE ORIGINAL: WHAT EVERY INVESTOR SHOULD KNOW ABOUT STOCK ANALYSIS
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