Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs.
Disincentivize the massive fraud that we see today.
Disincentivize the massive fraud that we see today.
In theory it works because the government auditor would be more interested in justice than corporate interests. In practice, an embedded external employee would not have the relationships to have viable information and would probably end up doing only the most perfunctory level of work to not be fired.
My org had this issue where our cyber group embedded an employee in each organization (we basically had a federation of different groups with separate funding streams and incentives) but their career ladders were disconnected from the local org. So the boss in the cyber org never really knew the work and just wanted safety. The org wanted to produce for their mission. So it led to this weird cycle where the embedded cyber person would stop stop every new project. The cyber boss was happy and promoted and gave raises. But it was bad for the org because no new projects.
For SEC compliance reporting, I’ve seen banks take it both very seriously and provide the absolute minimum to pass muster such that the COs could barely do their jobs.
What’s clear is that the “same old” and “reasonable” approaches aren’t working, and a disruption is needed.
So then what if a company is seeking to expand internationally, and looking at options for various reasons (including costs, which includes the tax burden). Isn’t it a conflict of interest to have a US government employee weighing in on how to improve a company at the loss of IRS revenue?
And that’s an extreme example. Any company accountant or CFO is going to be involved in regular decisions where “paying less tax” is an important outcome to consider.
Many of the smaller businesses rely on dodge—by-cash or function just fine.
In fact, the audit problems caused by tiny, front/fake LLCs and paper companies lead to a real, criminal-level audit trail problem.
https://www.nbcnews.com/news/amp/ncna1279664
May be the govt should have private sector auditors to help with that?
Yes, fraudsters will take full advantage of it.
Your example shows why we need more auditers and more frequent auditing, not less.
Yes more auditors for govt. Not more govt. auditors for business.
More auditing != govt auditing of private business
There is a jump of logic there to go from left to right of the equation.
It was your example.
Explain then the point of your example, beyond “see, government must be incompetent.”
Because I see a leap of logic in saying “government (org) +government (audit)” incompetence implies “private (org) + goverment (audit)” incompetence.
Nevermind that all nuance was stripped away in making a one-liner.
“The agency had never expected to pass, however, due to accounting issues officials said could take years to fix. Because accounting records needed to complete the assessment were not available, all five audits received a “disclaimer of opinion,” though there have been improvements each time. ”
https://thehill.com/policy/defense/3740921-defense-departmen...
The objection you’ve raised, if anything, highlights the need for a neutral outside party to annually audit and create thorough paper trails for very large organizations.
Do you want to pursue this line of argument further?