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Table of Contents
The Impact of Value Preferences on Whistleblowing Intentions of Accounting Professionals | Full Article (PDF)
Tara Shawver
Lynn H. Clements
Abstract: This article explores the relationship between an individual's values preferences and his or her ethical evaluations, moral judgments, and ethical intentions to report three situations of occupational fraud. Specifically, we attempt to find evidence of one or more values that may influence an accountant to identify an ethical violation (i.e., ethical evaluation) to determine whether or not there is moral judgment to blow the whistle on the ethical violation (i.e., the action should be reported), and/or to determine whether or not there is moral intention to blow the whistle on the ethical violation (i.e., the action would be reported). Our study was conducted by administering a survey to 387 accountants attending state society-sponsored continuing education classes in a controlled experiment. Of the 387 attendees, 277 agreed to participate, providing a seventy-two percent response rate. We find that competence affects moral judgment to whistle blow for unethical actions (i.e., the whistle should be blown). However, we find no support that the value preferences suggested by prior research impact ethical evaluations or the moral intention to whistle blow (i.e., the whistle most likely would not be blown).
Keywords: Ethical decisions; value orientation preferences; whistleblowing judgment; whistleblowing intentions
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Earnings Management to Round up EPS a Penny: Testing for an Audit Quality Differential between Big Four and Non-Big Four Accounting Firms | Full Article (PDF)
Charles E. Jordan
Stan Clark
Valerie C. Simmons
Abstract: Calculating EPS frequently results in a number stretching several digits to the right of the decimal point. Yet, reporting EPS requires that it be rounded to the nearest cent (e.g., computed EPS of $.09462 would be rounded down to $.09 while $.09502 would be rounded up to $.10). The change to income required to round EPS up (rather than down) a cent can be miniscule, but the effects may be substantial for a company or its management, especially if the rounding allows the entity to meet earnings expectations. For a large sample of companies, earnings management to round EPS up, instead of down, a penny would be indicated if the third digit right of the decimal point in calculated EPS falls in the range five-nine (zero-four) significantly more (less) than fifty percent of the time. We test for this type of earnings management in post-SOX samples of entities as segregated by their audit firms (i.e., Big 4 vs. non-Big 4). The results reveal clear signs of this opportunistic reporting for the clients of non-Big 4 firms but no indication of it for the Big 4 auditees, thus providing anecdotal evidence of an audit quality differential between these two groups of auditors.
Keywords: earnings management; earnings rounding; earnings per share; audit quality; Big 4 audit firms; non-Big 4 audit firms
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Evidence Regarding Management’s Choice of Forecast Precision and Financial Statement Irregularities | Full Article (PDF)
- The Impact of Value Preferences on Whistleblowing Intentions of Accounting Professionals
- Earnings Management to Round up EPS a Penny: Testing for an Audit Quality Differential between Big Four and Non-Big Four Accounting Firms
- Evidence Regarding Management’s Choice of Forecast Precision and Financial Statement Irregularities
- Auditor Confidence in Management’s Plausible Explanations
- Future Forensic Accountants: Developing Awareness of Perceptual Blindness
- How Informative Are Fraud and Non-Fraud Firms’ Earnings?
- Profiles of Madoff Ponzi Scheme Victims
- Forensic Accounting Core and Interdisciplinary Curricula Components in Australian Universities: Analysis of Websites
- Gem of the Indian Banking Fraud: A Case of Systemic Control Failures at Punjab National Bank
- Financial Statements Too Good to be True? An Instructional Case Assessing that Question Using Analytical Procedures and Beneish’s M-Score
- Book Reviews
- Events
Tara Shawver
Lynn H. Clements
Abstract: This article explores the relationship between an individual's values preferences and his or her ethical evaluations, moral judgments, and ethical intentions to report three situations of occupational fraud. Specifically, we attempt to find evidence of one or more values that may influence an accountant to identify an ethical violation (i.e., ethical evaluation) to determine whether or not there is moral judgment to blow the whistle on the ethical violation (i.e., the action should be reported), and/or to determine whether or not there is moral intention to blow the whistle on the ethical violation (i.e., the action would be reported). Our study was conducted by administering a survey to 387 accountants attending state society-sponsored continuing education classes in a controlled experiment. Of the 387 attendees, 277 agreed to participate, providing a seventy-two percent response rate. We find that competence affects moral judgment to whistle blow for unethical actions (i.e., the whistle should be blown). However, we find no support that the value preferences suggested by prior research impact ethical evaluations or the moral intention to whistle blow (i.e., the whistle most likely would not be blown).
Keywords: Ethical decisions; value orientation preferences; whistleblowing judgment; whistleblowing intentions
Back to Top
Charles E. Jordan
Stan Clark
Valerie C. Simmons
Abstract: Calculating EPS frequently results in a number stretching several digits to the right of the decimal point. Yet, reporting EPS requires that it be rounded to the nearest cent (e.g., computed EPS of $.09462 would be rounded down to $.09 while $.09502 would be rounded up to $.10). The change to income required to round EPS up (rather than down) a cent can be miniscule, but the effects may be substantial for a company or its management, especially if the rounding allows the entity to meet earnings expectations. For a large sample of companies, earnings management to round EPS up, instead of down, a penny would be indicated if the third digit right of the decimal point in calculated EPS falls in the range five-nine (zero-four) significantly more (less) than fifty percent of the time. We test for this type of earnings management in post-SOX samples of entities as segregated by their audit firms (i.e., Big 4 vs. non-Big 4). The results reveal clear signs of this opportunistic reporting for the clients of non-Big 4 firms but no indication of it for the Big 4 auditees, thus providing anecdotal evidence of an audit quality differential between these two groups of auditors.
Keywords: earnings management; earnings rounding; earnings per share; audit quality; Big 4 audit firms; non-Big 4 audit firms
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Yu-Ho Chi
David A. Ziebart
Abstract: In this study, we examine the precision in management forecasts of firms with subsequent restatements due to a reporting irregularity (a potentially intentional misstatement). We try to determine if there is a pattern between management forecast precision and reporting irregularities. If a pattern exists, then it might provide insight into the prediction that management may intend to or has used irregularities that may result in a restatement. We compare the precision of management forecasts that have a subsequent reporting irregularity with the management forecast precision of firms without irregularities or restatements in the period for which our irregularity sample earnings are restated (the restatement period). We contend that firms with subsequent reporting irregularities either chose (1) the forecast precision anticipating that they would be aggressive in their financial reporting or (2) were forced to be aggressive in their financial reporting once they had chosen their forecast precision and determined they would need to be aggressive to meet or beat their more precise forecast. Accordingly, we hypothesize that the earnings forecasts of firms with a reporting irregularity exhibit greater precision in their management earnings forecasts. Consistent with this hypothesis, we find that firms with a reporting irregularity are likely to have issued a point forecast or a smaller range (higher precision) forecast of earnings. Knowledge of this pattern might have assisted the auditor in identifying the possibility of a reporting irregularity. In addition, this pattern could assist investors to better understand the quality of the earnings being forecasted.
Keywords: Management earnings forecast; guidance form; irregularity
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Auditor Confidence in Management’s Plausible Explanations | Full Article (PDF)
Brian Patrick Green
Kevin Kobelsky
Michael Killey
Abstract: Prior research examines how auditor decision-making is negatively affected by heuristics and biases, including base rate and sample size neglect (Case, Fantino, and Goodie, 1999; Lovett and Schunn, 1999; Vinck et al., 2011; Pennycook and Thompson, 2016). These heuristics and biases can lead to improper evidence collection and deficient audit results. Therefore, understanding the frameworks that auditors utilize when assessing risk is of paramount importance. The purpose of this article is to present a theoretical discussion that introduces the Monty Hall problem as an alternative framework to explain auditors’ assignment of revised probabilities when multiple sources of risk are present. The Monty Hall problem (MHP) is a well-known decision-making problem, which is used as an accessible illustration. This paper also introduces the effects of ‘refuted explanation neglect,’ an extension to the ‘refuted selection (door) neglect’ found in the traditional MHP under conditions of equal and unequal probabilities. Refuted explanation neglect arises when auditors investigating the reasons for anomalous outcomes ignore the existence of alternative explanations that management has refuted. We then generalize the scenario to an audit setting by removing the problems’ base assumptions, moving from alternatives of equal to unequal probabilities, and introducing multiple explanation scenarios beyond the Monty Hall three alternative framework. When applying the MHP theory to three audit simulations, we demonstrate a level of auditor over-confidence in accepted management explanations.
Keywords: Probability bias; Monty Hall problem; audit risk
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Future Forensic Accountants: Developing Awareness of Perceptual Blindness | Full Article (PDF)
Radiah Othman
Fawzi Laswad
Abstract: The aim of this article is to bring awareness to the importance of perceptual (inattentional) blindness in educating future forensic accountants and fraud investigators. We examine the impact of perceptual blindness on students’ performance. The students were not exposed to the concept of perceptual blindness before the class activity. They were tested in six different scenarios that required them to analyze fraud symptoms, perform net worth and financial statements analysis, evaluate a surveillance log, and watch a video-recorded simulation of an interview with an alleged fraudster. The students were asked to recommend improvements in fraud prevention measures. The findings were consistent with the literature that says accounting students typically lack non-technical skills, which are essential for forensic professionals in examining and investigating fraud and other related cases. Our findings show that the students fell into the perceptual blindness phenomenon when analyzing various scenarios related to fraud auditing, detection, and investigation. The consideration of perceptual blindness and its implications for students’ performance is not typical in fraud/forensic accounting education. The findings show that familiarity with this concept is useful in developing the critical and analytical skills of accounting students. Further, it shows the negative consequences of perceptual blindness. This article highlights the importance of making students aware of perceptual blindness and its implications for their decision-making. The results also suggest that the concept be introduced at the beginning of fraud and/forensic accounting courses.
Keywords: Fraud, perceptual/inattentional blindness, forensic accounting, investigation, accounting education
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How Informative Are Fraud and Non-Fraud Firms’ Earnings? | Full Article (PDF)
Kwadwo Asare
Abstract: This study evaluates how informative the earnings of fraud firms are compared to peer non-fraud firms by assessing informativeness in the context of persistence, analysts’ forecast errors, and stock returns. There are differences in how informative the earnings of fraud firms are to analysts’ forecasts and returns in the pre-fraud period, but not in the fraud period. In the post- fraud period, there is no difference in how informative fraud firms’ earnings are to analysts’ earnings forecasts. Furthermore, fraud firm’s earnings are not differentially associated with excess returns post-fraud. When earnings are decomposed into accruals and cash flows, fraud firms’ accruals are more persistent pre-fraud and less so post- fraud while cash flows are not differentially persistent conditional on fraud. The study presents insights that can help practitioners, auditors, regulators, and researchers identify fraud candidates.
Keywords: Analysts’ forecast error; earnings quality; fraud; persistence; returns.
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Profiles of Madoff Ponzi Scheme Victims | Full Article (PDF)
Hossein Nouri
Brian Kremenich
Abstract: Prior research has examined the profiles of Ponzi scheme perpetrators but often overlooks Ponzi scheme victims. While individual stories of victims sometimes appear, there is limited information about the sufferers as a group. Most coverage of the victims focuses on the scam’s warning signs missed, victim compensation, and the celebrities caught in the mess. Even the Madoff fraud—the largest Ponzi scheme of all time—lacks research on those wrongly affected. This study analyses the background and demographics of a group of Madoff victims and attempts to answer the following questions: Who were these victims? What were their demographics? What careers did they have? Was there a “typical” victim? The results of the study indicate that identified Madoff victims were mainly wealthy, Jewish individuals residing in New York or Florida who were older but still working. In addition, the “typical” client identified from data in this research was well-educated, single, white, and likely to support Democratic Party-political candidates.
Key Words: Ponzi scheme; Bernie Madoff; investments; fraud
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Forensic Accounting Core and Interdisciplinary Curricula Components in Australian Universities: Analysis of Websites | Full Article (PDF)
Hashem Al-Shurafat
Claire Beattie
Gregory Jones
John Sands
Abstract: The recent reforms of accounting education in higher education institutions globally have opened new avenues for forensic accounting education. This article captures the structure of forensic accounting curricula within educational programs offered by Australian universities. Using a qualitative thematic analysis, a website analysis of the forty Australian universities offers an understanding of the core and interdisciplinary topics of forensic accounting curricula. The findings suggest that there exists a lack of emphasis on law knowledge, business valuation, and IT forensic integration. The courses emphasize fraud as core content knowledge, while criminology and ethics are interdisciplinary components. This pioneering study is undertaken in response to scholarly calls for the advancement of empirical research in this area. The study provides suggestions for educators to develop a forensic accounting program and sets the stage for an empirical journey regarding further studies in the face of the ever-growing importance of forensic accounting education and of forensic accounting as a profession.
Keywords: Forensic accounting; curricula; Australia, universities; website analysis
Back to Top
Gem of the Indian Banking Fraud: A Case of Systemic Control Failures at Punjab National Bank | Full Article (PDF)
Gagan Kukreja
Sanjay Gupa
Abstract: The case extensively details the fraud perpetrated against the Punjab National Bank (PNB) of India by a group of criminal co-conspirators, consisting of both bank insiders and outsiders, over a seven-year period from 2010 to 2017. The PNB initially estimated the cost of the fraud at USD 1.7 billion in February 2018. This teaching case endeavors to examine, evaluate, and reflect on the challenges inherent in management and auditing processes for the detection of fraud in trade finance transactions within the bank. The case highlights the operational risks facilitated by and orchestrated in collusion with, self-dealing bank managers exploiting the ineffectiveness of internal controls and oversights. It puts the spotlight on the role of employees, managers, auditors, the board of directors, and regulators in terms of misfeasance and malfeasance. The case study sheds some light on the modus operandi used by venal bank officers who colluded with unscrupulous corporate clients to commit fraud. In addition to providing opportunities for classroom discussions, the case fosters critical and reflective thinking skills in students on salient topics in auditing and forensic science, such as audit risk and planning, and internal control deficiencies in the changing technology environment. Finally, the instructional case offers recommendations to bankers, auditors, and regulators to avoid fraud from happening in the future.
Keywords: Bank fraud; fraud, money laundering; letter of undertaking; internal control failures; operational risks; SWIFT; trade finance; corporate governance
Back to Top
Financial Statements Too Good to be True? An Instructional Case Assessing that Question Using Analytical Procedures and Beneish’s M-Score | Full Article (PDF)
Canri Chan
Steven P. Landry
Abstract: This instructional case, derived from a real fraud allegation found on the SEC (Securities and Exchange Commission) AAER (Accounting and Auditing Enforcement Releases) website, enhances students learning experience in financial statement fraud detection by integrating auditing analytical procedures and financial statement analysis techniques. This case utilizes analytical procedures including common-size and ratio analysis, as well as Beneish’s probit model (M-Score) to detect possible fraudulent financial reporting. Students are provided Excel Spreadsheets with five years of 10K financial statement data from the company’s SEC filings. Students are asked to perform analytical procedures, calculate Beneish’s M-score, and finally to report their findings by specifically identifying and commenting on any anomalies/red flags, possible fraud schemes, and suggestions for further analysis/investigation. Instructors may assign different roles to students depending on the course being taught. Students can be assigned the role of fraud investigator for fraud detection/forensic accounting courses (see The Case Assignment Version I) or auditors for auditing courses (see The Case Assignment Version II).
Keywords: Fraudulent financial reporting detection; forensic accounting; auditing; fraud accounting
Back to Top
David A. Ziebart
Abstract: In this study, we examine the precision in management forecasts of firms with subsequent restatements due to a reporting irregularity (a potentially intentional misstatement). We try to determine if there is a pattern between management forecast precision and reporting irregularities. If a pattern exists, then it might provide insight into the prediction that management may intend to or has used irregularities that may result in a restatement. We compare the precision of management forecasts that have a subsequent reporting irregularity with the management forecast precision of firms without irregularities or restatements in the period for which our irregularity sample earnings are restated (the restatement period). We contend that firms with subsequent reporting irregularities either chose (1) the forecast precision anticipating that they would be aggressive in their financial reporting or (2) were forced to be aggressive in their financial reporting once they had chosen their forecast precision and determined they would need to be aggressive to meet or beat their more precise forecast. Accordingly, we hypothesize that the earnings forecasts of firms with a reporting irregularity exhibit greater precision in their management earnings forecasts. Consistent with this hypothesis, we find that firms with a reporting irregularity are likely to have issued a point forecast or a smaller range (higher precision) forecast of earnings. Knowledge of this pattern might have assisted the auditor in identifying the possibility of a reporting irregularity. In addition, this pattern could assist investors to better understand the quality of the earnings being forecasted.
Keywords: Management earnings forecast; guidance form; irregularity
Back to Top
Brian Patrick Green
Kevin Kobelsky
Michael Killey
Abstract: Prior research examines how auditor decision-making is negatively affected by heuristics and biases, including base rate and sample size neglect (Case, Fantino, and Goodie, 1999; Lovett and Schunn, 1999; Vinck et al., 2011; Pennycook and Thompson, 2016). These heuristics and biases can lead to improper evidence collection and deficient audit results. Therefore, understanding the frameworks that auditors utilize when assessing risk is of paramount importance. The purpose of this article is to present a theoretical discussion that introduces the Monty Hall problem as an alternative framework to explain auditors’ assignment of revised probabilities when multiple sources of risk are present. The Monty Hall problem (MHP) is a well-known decision-making problem, which is used as an accessible illustration. This paper also introduces the effects of ‘refuted explanation neglect,’ an extension to the ‘refuted selection (door) neglect’ found in the traditional MHP under conditions of equal and unequal probabilities. Refuted explanation neglect arises when auditors investigating the reasons for anomalous outcomes ignore the existence of alternative explanations that management has refuted. We then generalize the scenario to an audit setting by removing the problems’ base assumptions, moving from alternatives of equal to unequal probabilities, and introducing multiple explanation scenarios beyond the Monty Hall three alternative framework. When applying the MHP theory to three audit simulations, we demonstrate a level of auditor over-confidence in accepted management explanations.
Keywords: Probability bias; Monty Hall problem; audit risk
Back to Top
Radiah Othman
Fawzi Laswad
Abstract: The aim of this article is to bring awareness to the importance of perceptual (inattentional) blindness in educating future forensic accountants and fraud investigators. We examine the impact of perceptual blindness on students’ performance. The students were not exposed to the concept of perceptual blindness before the class activity. They were tested in six different scenarios that required them to analyze fraud symptoms, perform net worth and financial statements analysis, evaluate a surveillance log, and watch a video-recorded simulation of an interview with an alleged fraudster. The students were asked to recommend improvements in fraud prevention measures. The findings were consistent with the literature that says accounting students typically lack non-technical skills, which are essential for forensic professionals in examining and investigating fraud and other related cases. Our findings show that the students fell into the perceptual blindness phenomenon when analyzing various scenarios related to fraud auditing, detection, and investigation. The consideration of perceptual blindness and its implications for students’ performance is not typical in fraud/forensic accounting education. The findings show that familiarity with this concept is useful in developing the critical and analytical skills of accounting students. Further, it shows the negative consequences of perceptual blindness. This article highlights the importance of making students aware of perceptual blindness and its implications for their decision-making. The results also suggest that the concept be introduced at the beginning of fraud and/forensic accounting courses.
Keywords: Fraud, perceptual/inattentional blindness, forensic accounting, investigation, accounting education
Back to Top
Kwadwo Asare
Abstract: This study evaluates how informative the earnings of fraud firms are compared to peer non-fraud firms by assessing informativeness in the context of persistence, analysts’ forecast errors, and stock returns. There are differences in how informative the earnings of fraud firms are to analysts’ forecasts and returns in the pre-fraud period, but not in the fraud period. In the post- fraud period, there is no difference in how informative fraud firms’ earnings are to analysts’ earnings forecasts. Furthermore, fraud firm’s earnings are not differentially associated with excess returns post-fraud. When earnings are decomposed into accruals and cash flows, fraud firms’ accruals are more persistent pre-fraud and less so post- fraud while cash flows are not differentially persistent conditional on fraud. The study presents insights that can help practitioners, auditors, regulators, and researchers identify fraud candidates.
Keywords: Analysts’ forecast error; earnings quality; fraud; persistence; returns.
Back to Top
Hossein Nouri
Brian Kremenich
Abstract: Prior research has examined the profiles of Ponzi scheme perpetrators but often overlooks Ponzi scheme victims. While individual stories of victims sometimes appear, there is limited information about the sufferers as a group. Most coverage of the victims focuses on the scam’s warning signs missed, victim compensation, and the celebrities caught in the mess. Even the Madoff fraud—the largest Ponzi scheme of all time—lacks research on those wrongly affected. This study analyses the background and demographics of a group of Madoff victims and attempts to answer the following questions: Who were these victims? What were their demographics? What careers did they have? Was there a “typical” victim? The results of the study indicate that identified Madoff victims were mainly wealthy, Jewish individuals residing in New York or Florida who were older but still working. In addition, the “typical” client identified from data in this research was well-educated, single, white, and likely to support Democratic Party-political candidates.
Key Words: Ponzi scheme; Bernie Madoff; investments; fraud
Back to Top
Hashem Al-Shurafat
Claire Beattie
Gregory Jones
John Sands
Abstract: The recent reforms of accounting education in higher education institutions globally have opened new avenues for forensic accounting education. This article captures the structure of forensic accounting curricula within educational programs offered by Australian universities. Using a qualitative thematic analysis, a website analysis of the forty Australian universities offers an understanding of the core and interdisciplinary topics of forensic accounting curricula. The findings suggest that there exists a lack of emphasis on law knowledge, business valuation, and IT forensic integration. The courses emphasize fraud as core content knowledge, while criminology and ethics are interdisciplinary components. This pioneering study is undertaken in response to scholarly calls for the advancement of empirical research in this area. The study provides suggestions for educators to develop a forensic accounting program and sets the stage for an empirical journey regarding further studies in the face of the ever-growing importance of forensic accounting education and of forensic accounting as a profession.
Keywords: Forensic accounting; curricula; Australia, universities; website analysis
Back to Top
Gagan Kukreja
Sanjay Gupa
Abstract: The case extensively details the fraud perpetrated against the Punjab National Bank (PNB) of India by a group of criminal co-conspirators, consisting of both bank insiders and outsiders, over a seven-year period from 2010 to 2017. The PNB initially estimated the cost of the fraud at USD 1.7 billion in February 2018. This teaching case endeavors to examine, evaluate, and reflect on the challenges inherent in management and auditing processes for the detection of fraud in trade finance transactions within the bank. The case highlights the operational risks facilitated by and orchestrated in collusion with, self-dealing bank managers exploiting the ineffectiveness of internal controls and oversights. It puts the spotlight on the role of employees, managers, auditors, the board of directors, and regulators in terms of misfeasance and malfeasance. The case study sheds some light on the modus operandi used by venal bank officers who colluded with unscrupulous corporate clients to commit fraud. In addition to providing opportunities for classroom discussions, the case fosters critical and reflective thinking skills in students on salient topics in auditing and forensic science, such as audit risk and planning, and internal control deficiencies in the changing technology environment. Finally, the instructional case offers recommendations to bankers, auditors, and regulators to avoid fraud from happening in the future.
Keywords: Bank fraud; fraud, money laundering; letter of undertaking; internal control failures; operational risks; SWIFT; trade finance; corporate governance
Back to Top
Canri Chan
Steven P. Landry
Abstract: This instructional case, derived from a real fraud allegation found on the SEC (Securities and Exchange Commission) AAER (Accounting and Auditing Enforcement Releases) website, enhances students learning experience in financial statement fraud detection by integrating auditing analytical procedures and financial statement analysis techniques. This case utilizes analytical procedures including common-size and ratio analysis, as well as Beneish’s probit model (M-Score) to detect possible fraudulent financial reporting. Students are provided Excel Spreadsheets with five years of 10K financial statement data from the company’s SEC filings. Students are asked to perform analytical procedures, calculate Beneish’s M-score, and finally to report their findings by specifically identifying and commenting on any anomalies/red flags, possible fraud schemes, and suggestions for further analysis/investigation. Instructors may assign different roles to students depending on the course being taught. Students can be assigned the role of fraud investigator for fraud detection/forensic accounting courses (see The Case Assignment Version I) or auditors for auditing courses (see The Case Assignment Version II).
Keywords: Fraudulent financial reporting detection; forensic accounting; auditing; fraud accounting
Back to Top
| Book Reviews |
 Black Edge: Inside Information and Dirty MoneySheelah Kolhatkar, 2017, 344 pp. Random House New York, N.Y. Global.penguinrandomhouse.com Steven A. Cohen was one of Wall Street’s biggest success stories; the person everyone else in the business wanted to be. Born into a middle-class family on Long Island, he wanted from an early age to be a star on Wall Street. He mastered poker in high school, went off to Wharton, and in 1992 launched the hedge fund SAC Capital, which he built into a fifteen-billion-dollar empire, almost entirely on the basis of his wizard like stock trading. He cultivated an air of mystery, reclusiveness, and excess, by building a 35,000 square-foot mansion in Greenwich, Connecticut, flying to work by helicopter, and amassing one of the largest private art collections in the world. On Wall Street, Cohen was revered as a genius: one of the greatest traders who ever lived. His image was shattered, however, when SAC Capital became the target of a sprawling, seven-year investigation, led by a determined group of FBI agents, prosecutors, and SEC enforcement attorneys. Labeled by prosecutors as a “magnet for market cheaters” whose culture encouraged the relentless pursuit of “edge”—and even “black edge,” which is inside information—SAC Capital was ultimately indicted and pleaded guilty to charges of securities and wire fraud in connection with a vast insider trading scheme, even as Cohen himself was never charged. This book offers a revelatory look at the gray zone in which so much of Wall Street functions. The riveting, true-life legal thriller takes readers inside the government’s pursuit of Steven Cohen and his employees and raises urgent and troubling questions about the power and wealth of those who sit at the pinnacle of modern Wall Street. |
 From Jailer to JailedBernard B. Kerik, 2015, 304 pp. Threshold Editions 1230 Avenue of Americas New York, N.Y. 10020 The author details Bernard Kerik’s stunning fall from grace that whipsawed him through the criminal justice system, landed him in prison for three years and eleven days, and now fuels his unwavering and deeply personal fight for criminal justice reform. In an ironic turn of events, Kerik’s highest honor of being personally chosen by President George W. Bush to lead the Department of Homeland Security sparked his downfall. The retired New York City police commissioner was himself handcuffed, shackled, and—for a time—held in solitary confinement. Bernard Kerik provides a riveting, one-of-a-kind perspective on the American penal system as he details life on the inside with the experience of an acclaimed correctional commissioner from the outside. He compares what is supposed to be happening with what really happens behind prison walls. He takes readers deep into what he calls the “wasteland,” where inmates are warehoused and treated like animals, abused by those with power and authority, and deprived not only of their freedom but of respect and basic human dignity. Even those whose crimes were nonviolent—tax offenders, doctors who overbilled, commercial fishermen who caught too many fish—suffer draconian sentences that leave them without hope. Kerik exposes the willful, devastating collateral damage the prison system inflicts and the consequences for American society. He makes a compelling case for reform and calls for wholesale change that will make America “smart on crime” and forestall what he calls “the erosion of the very fabric of society.” Should be read by any potential white-collar criminal or executive thinking of cooking their books. |
 Fakes & Forgeries: The Criminals, the Scams, and the VictimsBrian Innes, 2005, 256 pp. The Reader’s Digest Association, Inc. Adult Trade Publishing Reader’s Digest Road Pleasantville, N.Y. 10570-7000 They are dishonest, deceptive, and downright illegal…but they’re also riveting and sometimes even brilliant. Fakes and forgeries—and the people behind them—grab out attention and never let it go. This book captures the excitement and stunning details of some of the world’s greatest scams. The author gives the inside story of how and why tricksters implemented their fakes, fascinating facts about their frauds, and new insights into how the forgeries often went undetected for years. These incredible hoaxes are brought to life with revealing photographs and “Forger’s Files,” boxes packed with little-known facts about the perpetrator, the hoax, or its aftermath. The author says almost anything at one time or another has been faked or forged. And it has not just been famous works of art, banknotes, and other fiscal items, wills, identity documents, furniture, jewels or property. Over the years, unscrupulous forgers have poured all their skill and concentration into producing fake bottles of whiskey, for example, and all sorts of merchandise, including everything from designer jeans to cans of beans. Some of the chapters include funny money, fake art, false paper, bogus identity, confident tricksters, and fakes for a cause. Probably should be on your bookshelf to help you maintain your skepticism. Even audacious Frank W. Abagnale gets four pages in the interesting book. On another page are Abagnale’s fourteen tips to avoid identity theft. Bernie Madoff and Rita Crundwell should be in the next revision. |
 Healthcare Fraud: Auditing & Detection GuideRebecca S. Busch, 2nd Edition, 2012, 340 pp. John Wiley Hoboken, N.J. The world of healthcare fraud is much more than just pocketing money or a corporate asset. Stealing the very essence of human life, healthcare fraud ranges from false claims by perpetrators who perform needless procedures that disable and kill, to rogue Internet pharmacies. Once limited to petty thefts and deliberately incorrect billing, the world of healthcare fraud has become one of high-tech, highly skilled, educated, and professional perpetrators. This book is excellent for auditors, fraud investigators, and healthcare managers, revealing proven tips and techniques to help you spot the “red flags” of fraudulent activity, as well as the steps you need to take when fraud is suspected. The author presents comprehensive guidance on auditing and fraud detection for healthcare providers and company healthcare plans. |
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Events: NACVA and the CTI’s 2019 Annual Consultants’ Conference The NACVA and the CTI’s 2019 Annual Consultants’ Conference will be held June 6–8, 2019, in Salt Lake City, Utah, at the Grand America Hotel. Early registration discounts are available. To learn more and register, visit http://www.annualconsultantsconference.com/, or call Member/Client Services at (800)677-2009. 2019 LSU Annual Fraud and Forensic Accounting Conference The LSU Fraud and Forensic Accounting Conference will be held July 17–18, 2019, in Baton Rouge, Louisiana, at the Crowne Plaza Hotel. Registration for the 2019 Conference is not open yet. More information: https://www.lsu.edu/business/accounting/newsevents/ffac/index.php |