When CFO are caught fudging the numbers, it's more likely they were pressured by upper management than looking for some immediate financial benefit.

At least that's the way research organization The Conference Board see it after analyzing more than 20 years of accounting and auditing enforcement actions by the Securities and Exchange Commission. The Conference Board's report says there's plenty of focus on why CEOs engage in accounting manipulations, but not as much direct insight into what draws CFOs into the schemes.

The research focused on accounting and auditing enforcements from 1982 to 2005. The study found CFOs have an inherently bigger risk of litigation in accounting manipulation cases, yet they often do not rein in the immediate personal financial benefits of cooking the books. CEOs who have engaged in manipulations, on the other hand, have greater personal incentives in the form of equity holdings in the company and more power to pull off a manipulation compared with CEOs who are not accused of wrongdoing.

The study also suggests the SEC more often characterizes the CEO, not the CFO, as the mastermind and the personal beneficiary of manipulations. It concludes when CEOs apply enough pressure, CFOs may acquiesce and set aside their role as watchdog of financial reporting quality.

That has implications for oversight the board of directors should establish to watch for such failures in corporate governance, the report says. It suggests that redesigning executive compensation packages to eliminate personal incentives to commit fraud may not be enough. In addition to those measures, companies need to focus on improving the CFO's independence by giving the CFO some distance from the CEO.

For example, companies might expand the responsibility of the board of directors or the audit committee to include some CFO oversight activities, such as recruitment of the CFO, performance evaluations and retention discussions.

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