U.S. regulators are tightening their scrutiny of accountants in an effort to crack down on firms bungling "red flags" that signal fraud and imperil customer money, the Wall Street Journal reported today. The increased attention is occurring largely at the Commodity Futures Trading Commission, where investigators and top officials were rattled by the collapses of Peregrine Financial Group Inc. and MF Global Holdings Ltd. At both firms, rules that are supposed to protect customer funds were allegedly broken without being detected by accountants. The CFTC has not accused the auditors for MF Global and Peregrine of wrongdoing. But their inability to spot problems is spurring the agency to examine more closely whether accountants, under CFTC’s existing rules, are properly policing the financial controls at thousands of U.S. futures and swaps firms.
