FINANCIAL SECURITY AND ACCOUNTING MALPRACTICE
From the very beginning of the new century there have been several corporate scandals both in Europe and the United States, which have led to huge stock market falls, nationalization of banks and even the disappearance thereof. These scandals have caused serious damage to shareholders, employees, and creditors alike. In addition, they have evidenced the need to enhance the existing rules and regulations on financial information disclosure by the large listed companies, thus strengthening the enforcement of transparent financial reporting.
In an effort to call attention to these serious issues and to protect individual investors, the World Federation of Investors (WFI) has drafted a report: "Financial Security and Accounting Malpractice", 13 July 2015.
The aim is to submit the report to all of the European supervisory authorities, European audit bodies, as well as to the remaining relevant financial institutions, in order to achieve the following goals: *i) making clear its concerns regarding the need to implement a regulatory change which goes beyond Directive 2014/56/EU, yet along the lines of the US Sarbanes-Oxley Act (SOX); (ii) putting forward the need to adopt measures aimed at stopping the financial scandals, stemming from financial and accounting malpractice, that have taken place in Europe in the last years, and; (iii) reporting the situation of a series of European companies facing instability as a result of dubious financial practices, which could very well lead to new financial scandals to add to the ones already existing.
In spite of the fact that remarkable advances have been made in Europe departing from the US SOX Act — although not every country has taken such piece of legislation as its starting point — European regulation is far behind the stringent US rules and regulations put in place to combat fraud and financial malpractice. WFI hopes to engage all parties in a dialog and the creation of laws to insure transparency, accurate accounting practices, and fair treatment of all shareholders.
WFI Cover Letter | "Financial Security and Accounting Malpractice" Report