My humble proposal to prevent financial crimes at the level we have recently seen.
For every audit done by a CPA firm Require a second review audit, by a second randomly selected firm. The review audit will be limited to what the first audit caught/missed and/or may have applied the wrong statute/rule/law.
Companies, like real people, have limits on their 5th amendment rights. Still some issues against self-incrimination will always come up. Currently many private (NASD) and government (SEC) review institutions already require self-reporting of crimes by companies when the company discovers them - so a path to disclosure could legally be made (that needle can be threaded by people much smarter than me).
Here is how it gets interesting. The review audit would not go to the company but instead go confidentially to each Attorney General, in each state, in which the company currently files any type of tax return.
CPA Firms love to complain about other firms behind their backs, and brag about what they do well every chance they get. They also see thing more clearly when their livelihood does not depend on what they say. Even the first auditor would be more likely to write their reports more clearly and accurately - instead of one of the fifteen different ways management and their attorneys demand it be presented/written.
Yes auditors send multiple audit drafts to company mangers for editing and changes before the "public, review agencies, and investors" ever see the words that are left.
If review audits were required/implemented the next 10 years could be very interesting series of disclosures. Potentially Protective Actions earlier than later. Actions that could protect investors, employees, and the public from the harm of a Madoff/Peregrine/Enron scale (and smaller) financial thefts. Thefts that Madoff/Peregrine/Enron and hundreds more got away with and only found out after the money was gone.
This proposal is similar to that in the lending business where appraisers are now chosen randomly and those appraisals are to be done with interference from the Real Estate agents involved.
I have to believe that people as greedy and mean as the Koch brothers would hate this kind of scrutiny. My humble intuition tells me that the Koch brothers routinely cheat on their taxes and that long term is has become a huge source of their wealth creation. Of course I have absolutely no evidence of any tax fraud by a Koch brother.