Fraud EDge: A forum for fraud-fighting faculty in higher ed
Bringing the real world into the classroom is challenging, but Tana Kristjanson and John Rankin, in this column, show how it can be done. Tana is the creator and instructor of the third-year “Fraud Awareness” course (students must be at least in their third year of college) in the Bachelor of Business Administration – Accounting program at Camosun College in Victoria, B.C. in Canada. John is an anti-fraud practitioner who has been collaborating with Tana on the “Fraud Awareness” course since 2010. His work since 2006 has focused on investigative and forensic accounting and internal control risk assessments.
Students always enjoy hearing case details from visiting practitioners. But in the process they’re also exposed to real-world fraud examination concepts from different perspectives. And just as every parent discovers, students are more likely to accept truths told by others than their teachers.
| Editor George Young, Ph.D., CFE, CPA
Educators have always brought guest speakers into classrooms, but the collaborative approach Tana describes is a more sustained arrangement that produces practitioners’ greater involvement in students’ education. Practitioners actively participate in the planning, assessment and creation of the course’s content and exam questions. Many of my colleagues have used similar approaches. As long as this method doesn’t violate college or university policy, everyone (especially the students, of course) benefits from this collaboration. — George Young, Ph.D., CFE, CPA
Tana: In 2008, I conducted research to develop a fraud awareness course, which included interviewing fraud examiners to determine the important issues to highlight when teaching fraud awareness to accounting students.1 I realized that I also needed participation from practitioners, because I lacked both fieldwork experience as a fraud examiner and in-depth knowledge of the applicable law and practice standards. I also recognized that because no Canadian fraud examination textbook was available, supplementation was necessary to highlight Canadian standards. All the professionals I spoke to were helpful, and a few were willing to speak to my class.
I delivered the core of the course in a lecture style using the Albrecht et al. “Fraud Examination” text to support the content. I supplemented with guest speakers, such as the sergeant of the Commercial Crime Section of the Victoria Royal Canadian Mounted Police, lawyers, judges, tax auditors and an attest auditor who had uncovered allegations of fraud. In the first few semesters, I found that although students enjoyed hearing the guest speakers’ perspectives, they didn’t view the guest speakers’ information as representing core knowledge for the course. I also asked John Rankin to be a guest lecturer.
John: When I completed several fraud examination engagements, I noted that we, as anti-fraud professionals, need to ensure that:
- Audit staff members have the necessary fraud examination skill sets to complete and assess the required internal control and fraud risk questionnaires.
- Management and auditors understand the difference between applying specific fraud examination skills and merely completing a fraud examination.
- Attest audit staff entering the fraud examination profession are able — or realize they aren’t able — to transition to a fraud mindset.
- Clients have a better understanding of the role of fraud examiners and the standards to which we adhere.
I realized that higher-education institutions need to infuse these practice fraud examination concepts into their instruction. So, I had these points in mind when Tana, in 2010, asked me to be a guest lecturer in her course. She also asked me to assess the plans for her course — including lecture notes and textbooks — and to discuss with her objectives and student feedback and reflect on my past experiences with trainees at a Chartered Accountant audit firm, with which I consult. I came to several conclusions about the class and how I could fit into it:
- Although the course had significant strengths — such as comprehensive coverage of the types of frauds and tools, technical terms and the development of forensic accounting — it didn’t fully address practice considerations.
- I would concentrate on the skills I learned from civil cases because I hadn’t worked on many fraud criminal cases.
- Many students couldn’t and wouldn’t become fraud examiners. However, future auditors, managers and controllers could benefit from learning their professional limitations in battling fraud and becoming familiar with the fraud examiner skill set.
- We should ensure that students understand the skill set and mindset that distinguish fraud examiners from attest auditors and other auditors.
- The text had a U.S. focus (no Canadian fraud examination textbook was available), but Tana was teaching the course in a Canadian college and wasn’t extensively teaching Canadian standards.
Tana: After we assessed the course and John’s skill set, we decided that he would prepare and present a session on fraud examination standards and practice tips and another on case studies. I was present at both sessions so that I could assist him, particularly during the case session.
John prepared his own materials, which I reviewed and evaluated to ensure they were consistent with the curriculum and the balance of the course. I prepared the students for each lecture by providing background information about John, discussing how his lecture fit into the course and asking the class to prepare questions for him. I made it clear to students that John would be preparing test questions based on the material he presented.
John: Overall, my objective was to convey to students the application of core knowledge, such as standards, ethics and tools over a range of frauds. My intent was to ignite interest in essential skills such as professional skepticism, analysis and the distinguishing of relevant details.
The first session on fraud examination standards and practice tips, which I presented early in the semester, comprised three sections. In the first section, I emphasized applicable professional standards with a particular focus on the codes of professional ethics of the ACFE and the Institute of Chartered Accountants of British Columbia plus the British Columbia Supreme Court expert rules.
In the second section of the first session, I explained the various roles a CFE could assume such as a consultant to an attorney or an expert witness. In the final section, I discussed the reasons an attorney might engage a CFE, how a CFE could assist an attorney, and how to formulate hypotheses and utilize the fraud theory approach, consistent with ACFE materials.
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