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1.  

   Huh?

   

   Sneeje, Aug 16th, 2007 @ 6:21pm

   
   

   I think you're right to question why Dell would do this, given the risk, but why wouldn't this logic apply to all laws with penalties associated with infractions? There is no law/penalty in existence that prevents all infractions. People still commit murders in the face of stiff penalties, so are those laws not useful?
   
   I admit I'm stumped by Dell's behavior but I think that perhaps the insight here lies not with the speculated weakness of SarbOx.

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2.  

   

   Anonymous Coward, Aug 16th, 2007 @ 6:51pm

   
   

   Interesting article.
   
   "it does raise some questions about the incentives facing business managers"
   That is one of the most important causes of fraudulent reporting. No law can prevent someone from juicing the numbers if the incentives are large enough, and there's little fear of detection and serious punishment.
   
   "SarbOx . . didn't even prove to be a deterrent."
   I get the feeling (although you didn't say so) that you believe that SarbOx being "useless", it should be repealed or weakened in some way. How will that improve deterrence? Its failure to deter wrongdoing should be remedied by making it stricter, and the punishments harsher - a more effective deterrent.
   
   "the 'tyranny' of quarterly earnings"
   This is the undue influence of Wall Street on how businesses are run. Don't let Wall Street run your company. Run it the way it should be run. If your board doesn't like it, find a company that's interested in earning profits rather than just the short term fluctuations of the stock price. The stock price will do better over the long term.

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3.  

   

   joe, Aug 16th, 2007 @ 7:22pm

   
   

   Overstating earnings between $50 million - $150 million between 2003-2006 is not adding a penny here and there in order to satisfy the Street's demands. Maybe some time in prison for the guilty parties would be a deterrent against Dell doing this again.

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4.  

   Responsibility

   

   Joe Smith, Aug 16th, 2007 @ 7:48pm

   
   

   I don't think they have given details of how it happened but from what I have read it could be something as simple as a single division, far from the oversight of management, doing a little anticipatory invoicing or not recording invoices in a timely fashion.
   
   This type of thing usually seems to start in response to a small miss that the someone thinks can be caught up next quarter and then it snowballs.
   
   We have been free from scandals while the economy was booming but if the economy starts to cool off the types of frauds that I mention will probably be widespread for a while.

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5.  

   Anti-SarbOx again

   

   Anonymous Coward, Aug 17th, 2007 @ 2:05am

   
   

   "Not only did SarbOx not do anything to prevent the fraud, but it didn't even prove to be a deterrent."
   
   Once again Techdirt makes no attempt to justify it's SarbOx position but simply passes on a position from somewhere else that techdirt doesn't really understand. Isn't that what corporate schills do ?.
   
   Any genuine attempt to understand would attempt to gauge what might have happened had SarbOx not existed - e.g would the fraud hve been bigger ? when would it have been discovered (if ever) ?

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6.  

   

   RandomThoughts, Aug 17th, 2007 @ 7:43am

   
   

   SOX isn't there to prevent companies from doing these types of things, its there to punish executives for doing these kind of things. The punishment is the deterrent. Getting rid of the punishment just doesn't make sense.
   
   If you ask progressive executives, SOX actually provides a benefit. Those that look at SOX as just a task they must do don't see benefits. Those that look at SOX as a way to transform their organization and the way they do business actually see the upside to SOX.

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7.  

   Re:

   

   |333173|3|_||3, Aug 17th, 2007 @ 8:10am

   
   

   According to Fortune (6th Aug), SOx is one of the reasons for the increase in the number of foreign companies listed on the London Stock Exchange compared with Wall Street.
   
   Related to teh "tyranny" of quarterly earnings, the recent dip in the share price of google because their growth was only 24% (not 27% as expected), ignoring the fact that any other company with a 24% growth would be amazing.

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8.  

   Re: According to Fortune

   

   Anonymous Coward, Aug 17th, 2007 @ 6:37pm

   
   

   Consider the source - Fortune magazine. A shill for big business and speculating in the stock market.

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9.  

   Missing the point

   

   Bystander, Aug 18th, 2007 @ 7:09am

   
   

   Both the article and the following comments miss a key point. It wasn't that Dell was jiggering the numbers to meet stock market expectations. It was unethical employees who jiggered numbers to fraudulently claim bonuses despite missing their numbers. Dell's fault was in not having controls in place that could have prevented the fraud.

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10.  

    Re: Missing the point

    

    reynard, Oct 30th, 2007 @ 3:26pm

    
    

    unethical employees or employees under instruction??????
    how long was this realy going on??????
    
    
    try 1996, not 2003.
    
    
    reynard

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