How to prevent investment fraud and Internal Control to prevent CEO from scamming investors?

Question

I am doing a research paper for my forensic account class on fraud and internal control. I need to write a suggestion on how to establish an internal control to prevent CEO from scamming people and prevent investment advisor from scamming people. This is based on true story. Here is the link to review http://www.tucsoncitizen.com/print/local...

What way can the company prevent it from happen? what can internal control auditor do? What can accountant do? What can the board of trustee can do with CEO who is scamming investors?

What way can the investor do to protect himself? How can they investingate the company to make sure it legitmate company?

Thank you for your help.

Answer 1

The only sure way is for investors to be allowed to send in external, independent auditors on a frequent basis.