Reputation Impact From Fraud Stakeholders beware. A declining reputation can have a significant impact on an organization. Just two and a half years after the initial public offering (IPO) of Basin Water, Inc., they were forced to issue a press release that would prove to be the beginning of the end. The company was defunct within one year of the initial press release which indicated a potential problem involving the operational risk of financial statement fraud pertaining to revenue recognition. This is merely one example where 72% of Securities and Exchange Commission (SEC) investigations in fiscal year 2010 identified deficiencies with 42% resulting in “significant findings”. When those issues are… Read More
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