Most Say Regulation Will Increase for All Industries


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Most Say Regulation Will Increase for All Industries

David Williams
Leader
Deloitte

More than half (58.2 percent) of business professionals polled on a recent Deloitte webcast said the level of transparency the Obama administration promises to attach to bailout spending is not possible.

“Stimulus funds need to be infused into the economy as quickly and efficiently as possible in order to stimulate growth,” said David Williams, leader of Deloitte’s Financial Advisory Services practice. “However, the legislative process as well as the public’s desire for transparency surrounding how stimulus funds are allocated do not bode well for getting stimulus funds into the economy quickly.”

Most poll respondents (80 percent) indicated that the emphasis on transparency and accountability in government spending will translate into wider regulations for all businesses. And, 40.5 percent said that — regardless of whether their companies will benefit from stimulus funding — the government emphasis on transparency and ethics will lead them to address their companies’ anti-fraud programs and controls.

“Beyond conducting fraud risk assessments to figure out if existing controls adequately cover risks unique to their organizations, executives and boards will need to gain a better understanding of the False Claims Act,” said Williams. “While familiarity with this term is almost nonexistent today, the False Claims Act is likely to achieve increased visibility as bailout money is further injected into the economy.”

In fact, 79.8 percent of respondents admitted they were unfamiliar with the False Claims Act.

“Currently, the government’s primary civil fraud enforcement mechanism, the False Claims Act, empowers individuals to ‘blow the whistle’ on companies that defraud the government and receive a ‘finders fee’ if the government collects fines or retribution,” continued Williams. “In addition, if two bills pending a vote in the Senate expand the reach of the False Claims Act, enforcement efforts by the FBI and DOJ will accelerate. Furthermore, we would expect that the amount of money the government recovers will increase substantially in the coming years, well beyond the average of $1 billion recovered annually during the past two decades.”

More than 1,540 business professionals from the financial services; consumer and industrial products; technology, media and telecom; banking and securities; energy and resources industries; and other industries responded to the survey questions during the March 23 webcast, titled “Oversight of the Fiscal Stimulus Bill: Transparency in a New Age.”

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