Cutting Edge Watchdog
Which watchdog is at the forefront of efforts to detect and report corporate accounting malfeasance? Regulatory agencies? Auditors? NGOs? No, it’s the financial press according to Gregory Miller, a professor at Harvard Business School. According to Dr. Miller, the “press is important in uncovering these things, they uncover a third of them in advance, and they even create the original information in a large percentage of the situations. Often, the press is way out there before the SEC.”
In an interview discussing his paper “The Press as a Watchdog for Accounting Fraud” published in the Journal of Accounting Research, Dr. Miller helps debunk the popular fiction that the print media is dinosaur. Instead, his research has found that the “press provides new and original information. A lot of people didn't expect that. People in the press did. But most other people really are surprised to see that because they think of the press as repeaters and not as creators.”
At a time when electronic media is thought to be at the forefront of news reporting, Miller makes clear that in the financial world there is no substitute for the print media since TV, radio and online news “source so much from the print press.” Although cutbacks are all the rage in many newsrooms, it would be best for publishers to take notice of Dr. Miller’s paper which notes that “frauds are often filled with conflict, drama and deviant behavior, all of which are considered components of a compelling story. Compelling and entertaining stories lead to a larger reader base and a related increase in revenues from subscriptions and advertising....”
It’s about time that the print media, particularly the trade and speciality press, received appropriate recognition for their work as cutting edge watchdogs.
See HBS’ Working Knowledge interview with Dr. Miller
See “The Press as a Watchdog for Accounting Fraud”
