COSO Report on Stock Fraud Validates asensio.com’s Own Experience and findings.

A study released this past May by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on fraudulent financial reporting by U.S. public companies, which examined financial statement fraud allegations investigated by the U.S. Securities and Exchange Commission (“SEC”) over a ten-year period, found that all of the 347 fraudulent firms in the study received an unqualified opinion from their auditors on the last set of fraudulently misstated financial statements.

The COSO study also found that the severity of the penalties associated with financial fraud may not be a sufficient deterrent and that stock-price declines resulting from initial news of an alleged fraud were over two times greater than those resulting from announcements of SEC or Department of Justice investigations.

The most common fraudulent schemes were inflated revenues, which accounted for over 60 percent of the cases, followed by overstated assets, which in the experience of asensio.com, results from having to inflate assets instead of recognizing a cost or expense, and is a common component of fraudulently overstated profits.

The COSO report listed motives for fraud including the need to meet earnings expectations and the desire to increase management compensation.

The COSO report is available at http://www.coso.org/FraudReport.htm

COSO was formed in 1985 to sponsor the National Commission on Fraudulent Financial Reporting, an independent private-sector initiative studying the factors that lead to fraudulent financial reporting. It also developed recommendations for public companies, auditors, the SEC and other regulators, and educational institutions.

Posted in Front Page Posts, Investor Advocacy

Manuel Asensio doesn’t bet often. But when he does, it’s wise to pay attention.

Paul Kaihla
eCompany Now
1 2 3 4 5 6 7 8 9
About Our Founder
Learn more about asensio.com's founder, Manuel P. Asensio, and the website's origins. Click here to be directed to Mr. Asensio’s professional biography.
Media Record
Click here to see selected articles that discuss asensio.com's work and its unique legacy. asensio.com also strives to maintain a complete record of articles dealing with the companies that are the subject of asensio.com research.
Investment Record
Click here to view a list of the companies that have been subjects of asensio.com reporting and click here to see the complete investment record.
Asensio and FINRA
Asensio & Company, Inc. and Manuel P. Asensio are the only dedicated short sellers ever to have been members of FINRA. This unique-minority membership created complications in the regulatory relationship. Being the first activist short investors and among the first FINRA member firms with a website added to the complexity. A statement by Mr. Asensio is available here. Information necessary to obtain a meaningful understanding of the dispute is available in complete form HERE.