| Who Watches the Watchmen |
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Auditors
Auditing firms are charged with protecting investors' interests, they are paid by the companies that they audit. Critics believe this can make it more difficult for firms to perform tough audits because auditors may be reluctant to criticize man
Job of ______ to independently examine a company's financial information and to make an assessment of its validity and accuracy
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Board of Directors
Executives' compensation packages have included large grants of stock options making them ever more sensitive to the short-term performance of the company's stock.
Ultimate responsibility of corporate management is to maintain the interests of the company's owners -- its shareholders
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Investment Banks
Critics charge that during the 1990s bull market, the "Chinese wall" did not exist and that the analyst and banking divisions were anything but independent. On the banking side, critics charge that the investment bankers were seduced by
To help a company raise funds through issuing stock or bonds, assisting in mergers and acquisitions, or performing other financial services. Their other function is to provide independent investment advice to investors
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Credit Rating
An potential conflict of interest exists in the way the credit rating agencies are paid. The issuing company that is applying for the rating pays a fee, and the industry has acknowledged that some companies use this to pressure the agencies
____________ agencies have published research and opinions on the creditworthiness of companies, governments, and other entities that issue securities
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Lawyers
Critics argue that a conflict of interest exists because lawyers, who are paid by the company, may be inclined to overlook or overreach to justify aggressive management actions.
Companies hire outside law firms to provide them with legal advice. The
lawyers have a professional obligation to act in the company's best interest and to maintain client confidentiality. |
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