Seven-step plan to rid the world of accounting fraud — Probe Forensics

A Fraud Scheme provided by FBI

A Fraud Scheme provided by FBI (Photo credit: Wikipedia)

This blog by Seymour Lightman at Probe Forensics is a recommended read. Check it out!

via Seven-step plan to rid the world of accounting fraud — Probe Forensics.

Accounting fraud is a special type of fraud involved with deliberately distorting the reporting of major financial variables like revenues, costs, assets and liabilities.

Accounting fraud seems to be on the increase, directly correlated to the staggering financial packages available to executives in large businesses. Sadly, auditors and regulators seem to be struggling against the flow. What is most significant is the size of the frauds these days. Enron was a watershed and we now live in a post-Enron World, obsessed with financial controls. But to bypass the controls, the fraudsters are getting more and more imaginative – along with increased risks the fraudsters want bigger rewards.

In my long professional career, I encountered fraud many times. By modern standards, the fraud to which I was exposed were relatively simple and small-scale.

For me, the seven-step plan proposed by Probe Forensics makes good sense. But there are powerful, vested interests who no doubt will prefer the status quo.

Any thoughts on preventing or limiting accounting fraud?

One response

  1. Dr Alf is a former financial director and is a qualified accountant so he would understand whether Probe Forensics has a workable solution to accounting fraud more than most.

    The reality is that until you change people to the extent that they have no more “larceny in their hearts” you are always going to have accounting and other fraud.

    People are also prone to be greedy and avaricious which is why our maker arranged for 10(in fact 15) Commandments to be inscribed on tablets of stone given to Moses in the story contained in the Old Testament.

    Greed is prohibited and at worst discouraged by at least 20 other religeons and even by secular humanists and agnostics who wish to live by their version of the “golden rule”.

    Then there is envy another basic human emotion which is made worse when societies become unequal and people see that the rewards for lying,criminality and malfeasance(alleged and actual) are to be more or less allowed to get away with it as we saw with the UK bankers,the Longbridge 4 and all but 4 of the MP’s caught fiddling their expenses.

    I am afraid that accounting fraud and all other forms of fraud will always be with us and that companies like Probe Forensics will always be busy.

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