However, since this question is asking for a more comprehensive answer, we need not just look at the firms’ organizational controls but we should look at other agencies and or auditing firms as well.
First, the most important organizational control to implement in a case such as this one is a whistleblower program. However, one might argue; if the top is corrupt and did not formed an independent audit committee to oversee the organizational structure and controls there is not much one can do from the inside. Since the article inferred that collusion was rampant throughout the firm. The program should also include extending this information to other parties such as SEC, Federal Bureau of Investigations, as well as one could also inform reputable news agencies of this type of corruption. The article did state that Harry Markopolos did appropriate such actions against BMIS but the SEC was lagging when it came time to investigate. Now we have left the scope of the firm and now are entering into third party responsibility which should be also drawn into consideration when creating and implementing policies and procedures for compliance. Moreover, the article sites that BMIS had engaged an auditor whom was unqualified and did not the knowledge or the resources to pursue an engagement of this type. “David Friehling pled guilty to felony charges against him and lost his CPA license in July 2010. His sentence has been postponed multiple times, as he is also cooperating with the government.” (Wall Street Journal, 2008). This shows that organizational control within the Public Company Accounting Oversight Board (PCAOB) nor the American Institute of Certified Public Accountants (AICPA) where informed or cross referencing to see if they should be informed of such dealings. These boards are mainly academic; however they should take on a roll which would be more controlling. In other words, an agency where one can find out information when requested as well as themselves looking at past and current dealing and finding out why they are not being informed and why persons or firms have been not keeping up with the regulations that are stipulated within the appropriate designations. Secondly, I should now look at internal controls. Again we need to look past what the firm should have implemented and look at what the other agencies could have or should have done. The firm itself …show more content…
Since that would be almost impossible to implement and inforce, we need to look to the auditors for putting into action and scrutinizing practices of companies as well as governing auditing bodies to lobby government for legislative changes. Therefore a compliance audit is required here. An annual compliance audit from a firm that is independent from BMIS in fact and appearance would have been crucial in finding and reporting fraud. This would have determined whether BMIS was complying with external criteria such as specific laws i.e. order flow which was mentioned. The policies and procedures that Peter Madoff the Chief Compliance Officer (CCO) had created but did not adhere to would have been discovered. What is more a compliance audit of the firm would have found that internal controls were not