FBI Executive Asst. Director Ashley on Interrnal Audits and FBI Priorities

Institute of Interntal Auditors addressed by FBI's Ashley during fraud seminar


In fact, there has been some debate in the public square over whether corporate fraud has been "over-enforced." Critics point to the prosecution and conviction of Martha Stewart as an example. But think back, for a moment, to the collapse of Enron and the wave of corporate scandals that followed. Think about the stature and power of the corrupt companies that were disgraced. And then think about the retirees whose lifelong savings were looted.

Think about the students whose parents can no longer afford to send them to college. Think of the elderly who can't pay for their medication. Monetary loss is just one part of the problem. It is impossible to quantify the magnitude of human loss that these criminals deliberately caused.

And that is why we must continue to work together to detect and investigate corporate fraud and bring corporate criminals to justice. Law enforcement and the justice system play a large role. But the importance of the auditing and accounting process cannot be overstated, and its role is equally important. By ensuring transparent and reliable financial reporting, accountants are critical to keeping us all honest and fair--from small businesses to vast federal agencies.

You are the first line of defense against corporate fraud--you are the beat cops and first responders. You are the conscience of the organizations you audit. You are the custodians of their ethics. You are not just checking boxes--you are constantly scanning the horizon for inconsistencies or irregularities, like an FBI agent conducting routine surveillance.

Just as my role has changed since 9/11, your role has changed since Enron and "SOX." If there is advice I could give you from the law enforcement perspective, it would be this: First, continue to be proactive. We know you are under pressure from many sides, but you must continue to alert the chain of command to possible fraud. And you also have to ask the tough questions, not just the "yes" or "no" questions, but more aggressive ones, such as "Tell me about the entries or accounting processes that you disagree with."

Second, continue to be independent. Your impartiality is a valuable asset, both during investigations and even on the stand. You make excellent witnesses, by the way. But here I'm going to have to poke all you internal auditors a bit ... where were you for Enron? Where were you for Qwest? Where were you for WorldCom, and all the rest? We can't let this happen again.

Third, continue to work with the FBI--or, better yet, come work for the FBI. Now, technically I'm not an approved FBI recruiter, but I will tell you that 15 percent of new special agents hired in 2004 had backgrounds in accounting. Currently, we have about 1,230 special agent accountants, but nearly 300 of them are eligible to retire next month. But you don't have to carry a badge and gun. There are plenty of non-agent accountants in the FBI, and we are always looking for more. Just wanted to throw that out there!

But whether or not you bring your accounting skills to the Bureau so that I can retire, your work is critical to our success, and we must continue to work together. I like to think that the men and women of the FBI are the guardians of America's freedom. In a very important sense, the men and women of the accounting profession are the guardians of America's economy.

We are not so very different. In both professions, our mission is to protect the American public. As accountants, we seek truth. If we do our job right, we increase investor confidence in the marketplace--and the economy flourishes. Our goal as FBI agents is to protect Americans from threats, whether from terrorism, abuses of civil rights, or fraud. And if we do our job right, our fellow citizens are safer, they have more confidence in us--and freedom flourishes.