Posts Tagged ‘fraud’
Covid-19 Fraud Risks Already Soaring
Well this is just great: a new report finds that fraud is rising across Corporate America, as cyber thieves and scam artists try to take advantage of the confusion spawned by companies responding to the Covid-19 crisis. The report, published by the Association of Certified Fraud Examiners on Tuesday, surveyed more than 1,800 anti-fraud professionals…
Read MoreFraud Study Shows Benefits of Control Measures
Compliance and audit executives looking to justify all the steps you take to fight fraud, break out your reading glasses! The Association of Certified Fraud Examiners just released a sweeping analysis of corporate fraud that suggests those measures really do pay off. The ACFE’s 2020 Report to the Nations studied more than 2,500 cases of…
Read MoreDiageo Lessons on Internal Control
Talk about going on a bender: the SEC just fined spirits maker Diageo $5 million for forcing its distributors to buy more liquor than they needed, and then neglecting to tell investors that Diageo’s inflated sales numbers would eventually dry out. In the world of funny numbers, what Diageo did is known as channel stuffing,…
Read MoreInternal Control Airball at Sacramento Kings
Talk about a flagrant foul: The former chief revenue officer for the Sacramento Kings was sentenced Monday to seven years in federal prison, for duping some of California’s largest businesses into wiring $13.4 million to bank accounts he secretly controlled so he could buy beachfront homes on the California coast. Jeffrey David worked as the…
Read MoreOh, Gee: Fraud Case Involving Estimates
We have a fresh case of accounting fraud to mull this week, this time with a Wisconsin trucking firm where three senior executives cooked the books for years and eventually drove $245 million of shareholder value over the cliff. Yet again, poor internal control over management estimates and use of spreadsheets played a starring role…
Read MoreLessons in SEC’s Latest Accounting Case
On Monday the SEC hit a Korean microchip manufacturer, MagnaChip Semiconductor, with a $3 million fine for accounting fraud—an extensive scheme to falsify revenue for several years, that wiped out more than two-thirds of the company’s value to investors. We have two lessons to learn here. First, even amid all the anti-regulatory fervor of the…
Read MoreConnecting Fraud, Pressure, and Culture
What’s the difference between a high performance culture, and a high-pressure one? The distinction is important, after all. Pressure is one of the three forces that drive employees to commit fraud, along with rationalization and opportunity. We see pressure all the time in Corporate America, manifesting in all sorts of troublesome ways. Exhibit A would…
Read MoreFitting the Fraud Triangle to Wells Fargo
This week I had the good fortune to participate in a compliance forum hosted by Thomson Reuters here in Boston, talking about how to engage with front-line employees to foster a strong compliance program. The conversation was excellent, especially because we had an example ripped from the headlines of how not to manage compliance in…
Read MoreCompliance Tech Challenges: The T&E Example
There we were last week, 14 of us, sitting around a large restaurant table to enjoy lunch and talk about data analytics tools to help compliance officers do their jobs. One participant vented about his company’s software to track travel and entertainment expenses. “I don’t like it,” the person said. “You get training on how…
Read MoreTale From the Front Lines of Small Frauds
I have always been a believer in paying my credit card balances in full, every month. So when Mrs. Radical Compliance had a few minutes last Saturday afternoon, I was happy to see that she decided to do the same with a personal credit card she has, too. This credit card is affiliated with one of…
Read More