Gerry Zack, CFE, CPA, CIA
Gerry Zack, CFE, CPA, CIA, is a an ACFE faculty member and was the 2015 chair of the ACFE Board of Regents. His email address is: gzack@bdo.com.
The many recipes for financial statement fraud
I’ve thoroughly enjoyed writing this column for you. I hope it was useful. Fraudsters have more ways than ever to cook the books, and CFEs need to be diligent in monitoring and investigating the financial and nonfinancial reporting of companies. At one time, we thought financial reporting fraud didn’t have a lot of variety. But now this couldn’t be further from the truth.
Written By: Gerry Zack, CFE, CPA, CIA
When 'fair value' isn't so fair
Fair value is one of the more complicated and controversial areas of accounting. Some assets and liabilities are initially recognized at their fair values, and some of those are subsequently adjusted to account for changes in fair value.
Written By: Gerry Zack, CFE, CPA, CIA
It's all about customer service
This column’s cases deal with improper accounting for special arrangements made with customers. Companies go to great lengths to meet sales goals, including offering special incentives for customers to buy their products. But the accounting rules provide a framework for how and when such incentives should be reflected in a company’s financial statements.
Written By: Gerry Zack, CFE, CPA, CIA
When do non-GAAP metrics become fraudulent publicity?
For years, companies reported their figures under GAAP or IFRS standards. But what happens when a company commingles the GAAP/IFRS-based financial information with other performance metrics in its reports and press releases? These extra measures have no standards, and no one audits them — perfect conditions for fraud.
Written By: Gerry Zack, CFE, CPA, CIA
Inventory inflation schemes come in many flavors
In this edition, I’ll examine some recent cases involving improper accounting for inventory resulting in overstated assets. As with so many of the companies in the cases I profile, the players in two of the three cases were motivated primarily by a desire to meet published or internal goals for gross profit.
Written By: Gerry Zack, CFE, CPA, CIA
Dipping into the cookie jar
Companies sometimes employ cookie-jar reserves during periods of strong financial performance as cushions for the inevitable future periods when performance will decline.
Written By: Gerry Zack, CFE, CPA, CIA
Won't get fooled again, but they'll try
With a nod to Pete Townshend and The Who, many auditors have expressed their determination to not get fooled again after being deceived by creative fraudsters. One of the underlying questions in many of the cases I’ve profiled is: “What did the auditors do?”
Written By: Gerry Zack, CFE, CPA, CIA
Don't sell the short sellers short
Say what you will about short sellers, but they’ve played an interesting role over the years when it comes to uncovering financial statement fraud. And if recent news is any indication, this role appears to be expanding and becoming more controversial than ever.
Written By: Gerry Zack, CFE, CPA, CIA
Where are these three infamous cases now?
Over the last few issues I’ve explained numerous financial reporting schemes using cases that might be obscure to some. However, in this column, I revisit three cases that captured the headlines when their stories first broke. Since then, their sagas have been relegated to the back pages, but they continue to have interesting developments.
Written By: Gerry Zack, CFE, CPA, CIA
Using one fraud to hide another
In each of the cases I’ve covered in recent columns, the only fraud involved cooking the books. But in other cases, fraudsters commit financial statement fraud as the secondary act to conceal the primary frauds.
Written By: Gerry Zack, CFE, CPA, CIA
Proving intent proves to be tricky
One of the more fascinating aspects of financial reporting fraud cases is the element of intent. Unlike asset misappropriations and most corruption cases, fraudulent intent isn’t always as obvious when the charges involve financial statement manipulation.
Written By: Gerry Zack, CFE, CPA, CIA
The link between corporate culture and fraud
The importance of the “tone at the top” in deterring fraud is a concept that most of us have read about in articles and studies. However, seeing tone at the top in practice and how it impacts an organization positively or negatively is the best way to understand exactly how this link works.
Written By: Gerry Zack, CFE, CPA, CIA
Nonprofit Fraud: When the Bottom Line is Not the Bottom Line
Because nonprofit financial reporting fraud often looks quite different than it does in the for-profit world so should the methods for finding it.
Written By: Gerry Zack, CFE, CPA, CIA
Hog fraud, negligent audit committee, disclosure omissions and more
Welcome to the first chapter of "The ACFE Cookbook," in which we'll examine recent cases and news involving alleged financial reporting fraud.
Written By: Gerry Zack, CFE, CPA, CIA
It's all about the revenue
This issue’s cookbook is devoted to two recent and interesting cases involving revenue manipulation — the most popular method of cooking the books. But I serve up several menu options in these cases. Which would you prefer today: round-tripping, channel stuffing or perhaps an order of side deals? Let’s get cooking.
Written By: Gerry Zack, CFE, CPA, CIA
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