BDO Transitions: Regulation must be backed by enforcement

REGULATION is meaningless without effective enforcement, according to a new report from accountants and business advisors BDO.

The latest in the Transitions series, ‘Transition to a New Regulatory Environment’, investigates recent failures in regulatory procedures and considers the lessons that should be learned.

Among the case studies it considers are the collapse of the business empire led by Allen Stanford and the Bernard Madoff fraud.

Giles Wharton, audit partner at BDO, says: “Financial analyst Alex Dalmady said it took him just 20 minutes to create the analysis spreadsheet that led him to claim Stanford Group Company  was a fraud.

“But, it was the company collapse that stopped the business, not the regulators, despite their visits and fines.”

The report argues that these spectacular failures underline its central case that smarter regulation, rather than simply extra red tape is what business needs.

It also makes the case that regulators need to have sufficient powers to punish those that break the rules if they are to be effective.

To read a series of features on the latest BDO Transitions report, and to download the document in full, click here.

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