Audit Committees Should Be Worried

The U.S. Securities and Exchange Commission and other regulatory agencies are hotly targeting audit committees and directors. Here are ways CFEs can help them fulfill their responsibilities and prevent fraud in their organizations.

On Feb. 28, the U.S. Securities and Exchange Commission (SEC) charged three ex-directors and audit committee members of DHB Industries for failure to appropriately address a growing fraud in their organization.

Last September, a federal jury convicted DHB Industries CEO David Brooks and Chief Operating Officer Sandra Hatfields for, among other things, multiple counts of securities fraud, insider trading and obstruction of justice. The federal government had accused them of "manipulating financial records to boost earnings and profit margins, and thus inflate DHB's stock price."