Of Broken Leases and ‘Broken Windows’ — Fenwick & West

But seen as a case about top executives deliberately creating false corporate documents and lying about it to the auditors, then the ALC case fits perfectly into the SEC’s “broken windows” strategy of focusing not just on revenue recognition and other traditionally fraudulent accounting practices, but instead also on disclosure issues and more isolated transgressions.3 And the ALC case serves as a reminder that creating false company documents — even if those actions have no effect on reported revenues, profits or other key financials — can have perilous results for the individuals involved.

via Of Broken Leases and ‘Broken Windows’ — Fenwick & West