Bill Dark — Countering Chinese Accounting Command Fraud In Addition To Predation Against U.S. Investors

Accounting command frauds target creditors in addition to shareholders equally their principal intended victims. Their principal weapon of fraud in addition to predation is accounting. The fine art is to inflate assets in addition to understate liabilities, which overstates majuscule in addition to income. White-collar criminologists, economists, accounting academics, in addition to regulators convey explained the repose amongst which the CEOs running command frauds are able to suborn supposed “controls” (auditors, appraisers, attorneys, in addition to credit rating agencies). The fine art is to suborn, non destroy, supposed ‘controls’ in addition to hence that they volition “bless” the CEO’s frauds, lending their reputation equally supposedly independent professionals to aid the CEO inwards defrauding creditors in addition to defrauding in addition to predating on shareholders. The CEOs leading the fraud in addition to predation tin terminate fifty-fifty purpose their mightiness to hire in addition to burn the fundamental officers at these supposed independent professional person controls to generate a “Gresham’s” dynamic inside their profession. George Akerlof, inwards his famous 1970 “lemons” article that led to honor to him of the Nobel Prize inwards Economics inwards 2001, commencement named that perverse dynamic. Akerlof explained how it worked....

New Economic Perspectives
Countering Chinese Accounting Control Fraud in addition to Predation Against U.S.A. Investors
William K. Black | Associate Professor of Economics in addition to Law, UMKC