Wall Street Journal had an interesting article earlier this week on the inner workings of out-of-court settlement deals with FIs. It noted how Western Union had to use a "monitor" to independently oversee the implementation of policies and procedures to remediate it's business practices that were found to be illegal by the Arizona's attorney-general. Specifically, the company had to pay $94 million (this was mentioned in the AG's website, not the WSJ article) for facilitating "blood wires" on behalf of "organized criminal cartels that seek to profit from Arizona’s porous border".
Activists, such as Matt Taibbi, have criticized such out of court of settlements as examples of a two-tiered justice system. He specifically cites how HSBC paid $1.9 billion for laundering drug money, but no jail time for the CEOs. In contrast, Cameron Douglas, son of the famous Michael Douglas, got 5 years for drug crimes (including possession and dealing).
Regardless of such a critique, it does give insights into how the audit profession can play an effective role in balancing the needs of businesses and oversight. The WSJ article goes into some detail as to how monitors are chosen by law enforcement officials (and the companies themselves) to ensure that the corporate governance and controls are implemented to ensure that the particular indiscretion does not occur again.
The article focused on the relationship between one of the monitors, Ted Greenberg (who according to the WSJ was a prosecutor) and his work with Western Union. However, Greenburg and Western Union had a fallout over the aggressive nature of his recommendations. The Arizona AG agreed and fired Greenburg.
And that's what I find interesting. Often the concept of "reasonable assurance" is something that non-auditors find hard to digest. And it seems that this could have played a role in the overbearing recommendations provided by Greenburg - who is a prosecutor not an auditor. And as it turns out, the Arizona AG seems to have the same line of thinking: they ended up replacing Greengburg with BDO.