Accountants Need Help Fighting War on Fraud

 

ACFE Founder Urges Anti-Fraud Education

 


AUSTIN, TX - October 12, 2005 - The founder and chairman of the Association of Certified Fraud Examiners (ACFE), Joseph T. Wells, CFE, CPA, fears our nation's CPAs are not trained to fight what may seem to be an intractable battle against accounting fraud.

"As a group, CPAs are neither stupid nor crooked. But the majority are still ignorant about fraud, " explains Wells, considered an international authority on the topic. "That's because for the last 80 years, untrained accounting graduates have been drafted to wage war against sophisticated liars and thieves. And as multi-billion dollar accounting failures have shown, it hasn't been much of a fight."

Legislation, including Sarbanes-Oxley, has not addressed a glaring oversight in the way colleges and universities educate auditors. In a 1999 study of America's 880 accounting programs, less than three percent offered a course in fraud. The situation is not much better todayimproving but has a long way to go. "Just ask the people holding accounting degrees," Wells says. How much did you learn about fraud in college? The shocking answer: little or nothing."

After two years in public accounting, Wells spent nearly a decade as an FBI agent. By working actual cases, it became obvious that his formal education and accounting training had left him sorely lacking, "I wouldn't have recognized a fraud because it is much more than simply numbers."

Wells says there are three reasons CPAs cannot catch all material misdeeds. The first is the dichotomy of fraud. "Trust is an essential element of business ? and an essential element of fraud," he explains. "Absent trust, it is impossible to con anyone. But absent trust, it is also impossible to conduct business." Second, fraud is a crime without unique clues, making it easy to miss. While it is hard to mistake a robbery, an embezzlement may be marked merely by numbers that don't add up.

Finally, CPAs can only audit what is presented to them. "Under-the-table deals, sham transactions and the like can be easily concealed," Wells states. "Holding CPAs to a standard that requires them to detect all material fraud puts them in a no-win situation and they know it. Still, auditors can certainly do a much better job than they've done in the past."

History has shown that key insiders are usually the first to divulge corporate misdeeds. Sharron Watkins of Enron and Cynthia Cooper of WorldCom are only the latest in a long line of employees tarred as whistleblowers. But auditors typically react to these tips rather than seeking them out in time to avoid major financial disasters.

"Accountants don't currently learn what motivates fraudulent conduct, how to spot the signals, how to prevent fraud from occurring and much more," Wells explains. "As it stands now, auditors are fighting a war without being taught how to recognize the enemy. Until that changes, expect more heavy casualties," he warns.

Contact the ACFE
For more information, email PR@ACFE.com.


 

247 Comments

  • Avatar

    I feel really happy to have seen your webpage and look forward to so many more entertaining times reading here. Thanks once more for all the details. Sewa Kereta Shah Alam http://rentalcarshahalam.blogspot.com/

  • Avatar

    I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. In fact your creative writing abilities has inspired me to start my own BlogEngine blog now. Really the blogging is spreading its wings rapidly. Your write up is a fine example of it
    http://www.ccsinternet.org/
    ccsinternet.org

  • Avatar

    I really enjoy simply reading all of your weblogs. Simply wanted to inform you that you have people like me who appreciate your work. Definitely a great post I would like to read this
    https://www.youtube.com/watch?v=eDBEc5VtoZA

  • Avatar

    Hi my friend! I wish to say that this post is amazing, nice written and include approximately all important infos. I would like to read this
    http://paintsprayerguru.com

  • Avatar

    You made such an interesting piece to read, giving every subject enlightenment for us to gain knowledge. Thanks for sharing the such information with us to read this
    http://www.hipnotiza-me.com/page/audio-hipnose

  • Avatar

    Very interesting blog. Alot of blogs I see these days don't really provide anything that I'm interested in, but I'm most definately interested in this one. Just thought that I would post and let you know. B.O.B https://www.youtube.com/watch?v=_tm8vIvSuuU

  • Avatar

    Thank you for benefiting from time to focus on this kind of, I feel firmly about it and also really like comprehending far more with this particular subject matter. In case doable, when you get know-how, is it possible to thoughts modernizing your site together with far more details? It’s extremely useful to me
    http://pageverts.com
    Manual website Traffic

  • Avatar

    A good blog always comes-up with new and exciting information and while reading I have feel that this blog is really have all those quality that qualify a blog to be a one.I wanted to leave a little comment to support you and wish you a good continuation. Wishing you the best of luck for all your blogging efforts read this http://pageverts.com

  • Avatar

    This is very educational content and written well for a change. It's nice to see that some people still understand how to write a quality post! SDR fat camps http://joinafitnesscampwithoutworryingabout.blogspot.com/

  • Avatar

    We believe that everyone deserves a chance at moving ahead with their lives. In our Mitigation services we strive to provide the Court with your history For our other court appointed services, our goal is to help provide the most up
    http://joshsmoneymakingtips.blogspot.co.uk/
    best freelance websites

Add Comment

Text Only 2000 character limit

Page 1 of 25

[First] [Previous] [Next] [Last]