Larry Dignan outlines the main points of the Entellium fraud. Regardless of the final outcome, there are three glaring questions:
- How did the CFO and CEO overstate revenues across THREE financial years by a factor of four to five times without someone noticing the obvious problem of accumulated receivables not being extinguished by incoming cash?
- What level of due diligence was undertaken by Ignition which is said to have invested $19 million?
- What were the two Ignition appointed board members doing?
As the recession bites harder, I expect to see a very different compliance regime. What form that takes is as yet unknown but I guarantee it will have a profound impact on enterprise systems.