Accountants and auditors can sometimes find themselves in an uncomfortable position when it comes to information that could lead to whistleblowing. Contrary to what some may believe, these folks are not constantly seeking fraud as their primary job duty. Why? Because finding fraud means more problems and even longer work hours to meet tight deadlines. In fact, finding fraud creates a number of challenges, and there can be attempts to convince the auditor or accountant not to speak up about it.
It turns out that a significant portion of internal auditors do feel pressure to keep findings of fraud to themselves, or to alter what they find—in North America, a full 25 percent responded that they had experienced pressure to alter what they found, or to suppress the information altogether. Considering the legislation that has been put in place to address corporate fraud in the U.S., along with solid protections and incentives to report it, the percentage is troubling.
Both the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and the Sarbanes-Oxley Act (SOx) provide considerable protections for accountants and auditors when it comes to blowing the whistle on unethical or illegal activities. The U.S. Supreme Court in 2014 made it clear that these protections also apply to external auditors, meaning that “employees of contractors of public companies” (which includes accountants and auditors employed by auditing/accounting firms) can bring retaliation cases under Sarbanes-Oxley.
Protections under SOx for accountants and auditors who believe they are experiencing retaliation include the possibility of receiving any lost benefits or wages, a restoration of their position at the company, and certain other damages that include non-economic harm, such as emotional distress. In March, 2014, a whistleblower was awarded $6 million by a jury in such a case.
The protections and awards under Dodd-Frank are quite similar but offer remedies that are slightly different, such as double back pay.
Accountants and auditors can and do receive awards for successfully blowing the whistle. When it comes to breaches of federal securities laws, the SEC Whistleblower Program dictates that such whistleblowers can receive between 10 and 30 percent of any collected monetary sanctions exceeding $1 million. Two recent successful SEC cases involving auditing and the audit trail are:
- August, 2016: The bringing to light of weaknesses in Monsanto’s internal accounting controls resulted in a former executive receiving an award of $22 million. It was the second-largest award in the SEC program’s history.
- August, 2014: An audit-and-compliance employee who reported a company’s wrongdoing received more than $300,000.
Those who work in auditing and accounting are often uniquely positioned to blow the whistle on corporate wrongdoing, and are encouraged to do so.
Working with whistleblowers tirelessly to shed light on fraudulent practices.
If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.
Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.
For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.