Keep Rolling

gratisography-433H

When I first started running, I was out training, and my knee suddenly buckled in pain. I thought I had broken something, but it turned out that I had IT band syndrome. I tried several approaches to get better. Among these, I would change up my routes so that I was balancing out which leg was favored, I worked to improve my gait and I started foam rolling. No one warned me about that rolling. I think tears sprung to my eyes that first day I foam rolled. I know for sure that I yelped in pain, several times (thankfully I was alone). I couldn’t believe that I was supposed to do this every day, but I had to roll through the pain because I had a race on my schedule and I needed my knee to start working again.

After rolling consistently, I was amazed by how much better everything worked. I was also incredibly relieved that the rolling didn’t hurt so much anymore. I was a foam rolling disciple and whenever anyone told me they were contemplating taking up running, I urged them to also contemplate taking up foam rolling. At a point, I actually found joy in foam rolling. I could get through a rolling session with nary a yelp. It was glorious.

Recently, foam rolling slipped out of my life. After a fall apparently chipped a piece of my knee into non-existence, I could not run at all and I was, instead, focused on weight training to strengthen my knees. At the end of a week of working out, the trainer advised a foam rolling session. I didn’t even think twice; I hadn’t been running, how bad could things be? Painfully terrible, it turns out.

Managing controls in a business works in a similar manner. Sometimes, when a company sets up or has an auditor highlight weaknesses in its control systems, the company will go about creating policies and procedures that address risks and institute controls. At times, with that company, new hires will be given these manuals to read and, if they are lucky, these new employees will receive training. This training will teach the employees about the culture of the company and how to follow policies and procedures, in order to minimize risk within that company. However, how often will that company review its policies and procedures to see if they are relevant to technological advances and new risks that have arisen?

  • How often will the company’s leadership review policies and procedures with existing staff, to ensure that people have not slacked off and are still, for instance, getting the approvals that they are supposed to obtain for transactions?
  • Is anyone checking that reconciliations are occurring monthly (or at whatever frequency has been established) and, once performed, that those reconciliations are being reviewed by the relevant staff?
  • If there is a policy for checks over a certain amount to be signed by two signatories, is anyone reviewing to make sure this is the case?
  • When employees have left the company, have their access to the company’s system been suspended? Once suspended, have their accounts been deleted so that no one else in the company can use them? If they were signatories for bank accounts, has the bank been informed and has the bank removed them from the signatory list?
  • Have the company’s staff received training in how to reduce the risk of phishing?
  • Has the company’s leadership received any training themselves to update them on current risks and to remind them what the policies and procedures of the company are?

These are just a few examples of the many ways in which a company should be regularly checking in and exercising its control muscles. If all you are doing is handing over a manual on day one and assuming that your staff knows what and how they need to do things, you are only setting yourself up for possible pain in the future.

  • Can you be surprised if one of your staff members gets phished and hackers gain access to your company? Think about the pain of finding out that someone pretending to be the CEO sent an email that instructed accounts payable to wire a sizeable amount of money to an offshore account and that accounts payable fell for the scam?
  • If no one is regularly reconciling accounts, can you really be shocked when you discover that an employee has taken advantage of this lack of oversight and embezzled money?
  • If accounts of former employees are not properly suspended and deleted, how will you figure out who has been using them since the former employee left? How will you be able to trace unauthorized transactions?
  • If your company’s leadership is not up to date on policies and procedures, how can they enforce them? At that point, everyone will be just guessing and hoping for the best. Being unprepared and hoping for the best tends to only work out well in the movies.

Maintaining and updating policies and procedures should be a proactive and continuous activity. Speak with a forensic CPA about how to create, institute and regularly review your control systems to reduce risk in your company. It may seem like schlep in the beginning, but having the systems serves a deterrent to those contemplating wrongdoing, it also keeps your staff more educated about how, for instance, they can recognize errors or attempts to suck them into a scam. This can also mean that when something is going awry, it is spotted earlier, minimizing possible losses.

You should be doing this to avoid or, at the very least, minimize any future pain. You don’t want to be like me where incredible pain leads to you even more pain, on the eventual path to healing. Take it from my IT band, proactive is so much better than reactive.

 

Advertisements
Tagged , , , , , , , , ,

Even When You Don’t Want To…

9ea73231-a8e0-4d06-9589-da7f1dc5e372

Linda Kadzombe

Linda was not my friend. I was in high school, sitting in the car, in the school parking lot, with my father, waiting for my little sister to show up. She ran up, with a friend and they stood by the car, smiling and sporting matching nose rings. My father looked up and the two girls, and their matching noses, and exclaimed – “I suppose nose rings are part of the school uniform now.” That is my first significant memory of Linda, who was my sister’s friend. Along with a great group of friends, Linda and I rang in 2000 in Victoria Falls. We talked about the fact that we were both moving the United States and we promised to keep in touch with each other. This vague promise turned into a relationship that the word “friend” does not do justice. With our families far away, we checked in with each other almost every day and often the conversation started this way: “Just checking in. I’m alive.” Once, I called Linda when I stuck in a dress I had ordered online and that I was trying on. She was living in Boston and I was in New York City and yet, she was the first number I thought of dialing. We were travel buddies and talked about becoming the sweet old lady travelers that we often came across during our trips. We shared a love of European chocolate and I was a person she taught, and gave permission, to stab her with an EpiPen should the need arise.

On March 6th, I received a call that had never even drifted into my imagination. While flying back home from an epic vacation with her cousins, Linda passed away. The news was devastating; it still is. At the same time, there was a lot to do. Whether or not you have planned for death, when death happens, there is a lot that needs to be done, not only to put your loved one to rest but also to sort out your loved one’s affairs. Friends and family came together for Linda and, as we navigated various issues, we were frustrated, energized, and touched, often all at the same moment. It made me think about the importance of planning, not only for the workplace, but also for one’s personal life.

The first step is the dreaded will. No one wants to ever think about their mortality but, even when you think you have nothing, you always have enough to put in a will. At the very least, you have your wishes. Even when you think to yourself – oh, I am single, and/or I don’t have children – you still should have a will. Remember that a will is a legal document and you should be sure to comply with the law, or your will may not be accepted as binding. For instance, the rules about whether or not a handwritten will is recognized varies by state. You should also see if your financial accounts can be set up to be transferrable or payable upon death, as this will save survivors the headaches of dealing with probate court. In addition to letting people know what you want done with your stuff, you should also think about how and where you wish to be laid to rest, if that is something that is important to you.

We live in an age of paperless billing and most business being transacted through online accounts. This means that, for many of us, all our accounts have a login and information about accounts and their existence may only exist in our email accounts. To questions about what accounts and liabilities Linda might have, we could only shrug and guess. Dashlane estimates that the average user has 90 online accounts! Consider making a list of your accounts that you will keep safeguarded in a safe, or with a lawyer, if you keep your will with a lawyer. There are various ways in which to work to both safeguard your personal information and also ensure that your accounts are known and closed correctly, after passing.

If you don’t already have it, get life insurance. The policy doesn’t have to be a big one; just enough to cover the costs that may come up due to death. These include:

  • Payment of final expenses;
  • Taking care of your loved ones, if you have loved ones that depend on you;
  • Payment of debts, so that your next of kin are not on the hook for them;
  • Payment of estate taxes

It may seem horribly morbid to talk about death and it is certainly no fun to deal with the affairs of a loved one. In the midst of grief, you don’t want to deal with some of the headaches that can pop up around the administration of everything – dealing with hospitals, funteral homes, airlines or whatever. Fortunately, Linda had an amazing network of people who loved her (and some incredibly kind strangers who saved the day more than once). All worked hard to get her home and laid to rest near her family. We also were able to spend a lot of quality time with friends and family that we had long promised to spend time with you. You know how that happens – next week, next month or next summer turns into ten years. However, through it all, we had a lot of figuring out how to do something or where to find things because we had never even thought about navigating this terrain.

Take some time to think about what you have and what you want done about it. Talk to your loved ones and tell them to make plans, if they have not already. Remember that it is never too early to plan and, unfortunately, often too late.

Tagged , , , , , , ,

One Team, One Dream

 

Pyeongchang Olympics Cross Country Men

The Winter Olympics are going on and I am filled with joy. From the opening ceremony until the end, I am inspired over and over again. Just the other day, Ester Ledecka, from the Czech Republic, won a gold medal, on skis she borrowed from USA’s Mikaela Shiffrin. Athletes, representing their countries, come together to compete against each other while, at the same time, showing incredible sportsmanship, teamwork and support of each other. Four skiers from so-called “tropical” or “exotic” nations (Colombia, Morocco, Portugal and Tonga), who were among the last to finish, waited for the last athlete, from Mexico, to finish. They cheered him across the finish line and raised him in exultation. How incredible is all that?

Since I stepped out and started my own company, I have been spending a lot of time alone. Honestly, even though I was working in offices, my last few positions had me working mostly on my own. Seriously, I could go for weeks without talking to anyone about what I was working on. I would sometimes wonder if anyone cared. I started working on a project a few months ago and I am being reminded how powerful a great team can be.

Modern offices are designed to have more interactions among people – offices are more open, there are games set up in the office and people can hang out on couches. Imagine that, comfortable furniture in the office. With all of that, though, I am finding that the real trick to interaction and successful communication at work sits with the people. I have been in open office spaces where, for days on end, people say barely a word to each other. I have walked down hallways where the person heading towards me will risk breaking their neck by looking anywhere but at me – the horror of a greeting is strong, apparently. The Inner Auditor kept me thinking about the priority of people in a business and on a team.

In the work that we do, we are often under pretty stressful conditions – clients are almost never happy to see us, we have tight deadlines and we are often trying to make sense of things that don’t make sense to the people doing those things. Each of us is incredibly busy and run the risk of keeping our heads down just get through everything assigned to us, while staying within budget. With that kind of pressure, the temptation is high to just put our head down, plug in our earphones and only engage when absolutely necessary. I am sure that approach can get the job done but I know, without a doubt, that the structure of the team that I worked with ensured that we excelled.

We did not choose our team, but I ended up working with three incredible women who have made me better at what I do and how I do it. I believe that we all agree that we have benefitted from our experience together. Each member of the team has a knowledge strength and is more than willing to share what they know and help us get a little stronger too. Even as deadlines have loomed and hours have stretched, our team has prioritized wellbeing. We have been taking time to read more, laugh more and talk to family and friends more. Because our team has come together on these various levels, we are also able to communicate the difficult information that comes up during our work. Sometimes, a person may come across information that will either upset the client or lead to more work. Sometimes a person may realize that they missed something. In these cases, if communication is not good, that person may choose to remain silent. Instead team members may end up spending energy on hiding issues and hoping that they are not discovered. That is never a good thing. Not only did our team feel comfortable about bringing up the issues, we were always willing to brainstorm and work together to resolve them.

Although this may sound like I am seriously crushing on my awesome team (which I am) it is also a great lesson in the incredible value of having a team that is talking to each other and working together in order to produce great work. In an office where no one is talking, and people are not interacting, how long do you think it will take to realize that something is wrong? If people view saying good morning as something to be avoided at all costs, who are they going to tell when they think the person in the cubicle next to them is doing things that they shouldn’t? If people are not talking about what their fellow work mates are doing, how are they to know who to turn to for assistance and will they even feel comfortable approach Janice who barely grunts when they come across each other in the office’s common space? And then, when fraud or error is found at the company, can you really be surprised that it took as long as it did for it to be discovered?

The time you take to get to know the people you are working comes with benefits that are worth far more than that time. It takes more than knocking down walls and providing great coffee. We spend a lot of time talking and reading about the impact of communication. We know this in theory but how often do we put energy into putting this into practice? I know that each one of us stepped outside our comfort zones in order to get to our Dream Team status. Each one of us made a conscious effort to reach out and share of ourselves. Each one of us was determined to produce exceptional work and communication was a key element of achieving that. I have been inspired by these women that I have worked with. I have laughed, been moved and been brave with them.  I shall be truly sad when this project is over and eternally grateful for the great experience. #OneTeamOneDream

Tagged , , , , , , , , , , , ,

Three Words for 2018? We Got This!

IMG_2843

Over the last week, I have been thinking about 2018. I don’t know about you, but 2018 snuck up on me. One moment I was caught up in the day-to-day of 2017 and the next moment 2018 was just a couple of weeks away! After my initial panic, I thought – well, it’s great because I get to think of my three words. Three words? Well, if you haven’t been on this journey with me before, I shall explain. In 2012, I met and was inspired by Tom Hood and he introduced me to the Three Words approach, which came from Chris Brogan. At the start of every year, now, I sit and think about what three words I would like to guide me through that year. During the year, I come back to those words, to help center, direct and motivate me. Over the last few days, I have thought about how to make this work better for me, and I determined that I must display these words to remind me, even when I am not thinking about being reminded, to move me when I feel stuck and to hold me accountable. I say this in part because, 2017 was a challenging year for me and I found that I often lost track of my guiding lights. Involved in, and sometimes overwhelmed by, the moment, I often forgot to even look for my words. Putting the words everywhere, will go a long way to keeping me mindful of that.

Last year, I started looking back over my year and I have found this to be a great way to assess how things went and to help me set my intentions for 2018. My three words:

Imagine. This is the first word that came to me. During 2017, in part through work and volunteering with the New York State Society of CPAs and the AICPA, I have had some truly new experiences. I have learnt how to play poker and how poker skills can benefit me in the workplace; I have worked with a team to consciously inch towards better health – physically, emotionally, and spiritually – and that has included laughing more and skating in Byrant Park; I have collaborated with incredible people and presented in various spaces, from a national conferences to a college campus. During the year, I have been involved in conversations that have opened my eyes, that have ventured into spaces that are often afraid to even tiptoe into, that have renewed my hope when things have seemed bleak. I have often reminded myself to listen and to hear because that is when I find the moments that hit me hard and that get me to imagine and those moments are incredible. When we imagine, and step outside of what we know, we can find brilliance, we can find understanding and, just as important, we can also see and revise the not so great. In 2018, I want to imagine without fear of where my imagination will lead me. I want to imagine and be okay with when what I imagine doesn’t always work out. I also want to make sure that I make the time and space for my imagination. Back in 2015, I tried to create space for me to be bored, which is a big part of creating the space for imagination and, as the exercise stated, brilliance. It did free my mind in great ways and, looking back and looking at now, I know I need a lot more boredom in my life. And I still haven’t finished my Starry Night jigsaw puzzle!

Innovate. During 2017, I listened and took part in conversations about change. The conversations were about artificial intelligence (AI) about blockchain (and cryptocurrencies, like Bitcoin) and about cybersecurity. Other conversations were about what diversity, inclusion, and belonging mean and if and why it is important. We had conversations about what to do about all the change happening in our professions, in our world and in our lives. We talked about how we react to it and how we can embrace, be ahead of and even create greatness out of all the change. Beyond the conversations, we brainstormed and tried new things. We looked at the new approaches other took and ran with them. I spend a lot of time looking at challenges and how, sometimes, people take the same approach to resolving them and see minuscule results. As much as we tout how “change is good”, it is a human thing to resist changing the status quo. During this year, I want to innovate. I want to collaborate and brainstorm and determine to try something new. I want to embrace the difficult conversations, appreciate and improve upon feedback and, on my part, provide truly constructive feedback. I want to remember the power of synergy and never forget that the best innovations come through a community of people sharing, listening and taking risks.

Act. My third word came to me after I wrote and thought about my 2017 look back. When it comes to training, I have established and go with what gets me to success. If I have a race, I print up a daily timetable that includes rest days, cross training days and exactly what I shall do on each day (distance, goals, tempos if needed). The night before every training, I put out exactly what I am going to wear on the day and I determine my route. I think about and take away all my excuses so that, when I wake up, I just do exactly as planned and that gets me a step closer to where I need to go. I keep my schedule on the wall and tick off each day as I go along. During 2017, I often did not apply this approach. As a result, especially where I felt the stakes were high, I became adept at getting cold feet, at second-guessing myself and at putting things off until I decided it was too late to do them. There are many reasons why this happened but knowing the reasons and doing nothing about them is not helpful. I am going to do more acting in 2018. To help me do this, I am going to find the ways to take away my excuses, and I am also going to be more realistic about what I can get done, so that I don’t end up doing many things in a mediocre manner that only serves to disappoint me and others. I also must remember to be kinder to myself when I act and to see the power in action. I must remember that it is through action that I can bring value and have impact.

Before diving into 2018, I want to take a moment and meditate upon my previous three words:

2013 – Change, Discover & Motivate
2014 – Transform, Pursue & Collaborate
2015 – Receptive, Synergy & Service
2016 – Learn Fear & Community
2017 – Embrace, Persevere & Monchu

Several years ago, I went to Hawaii with friends and decided to take surfing lessons. I was a couple of months out of surgery and hesitated before I went out – I wasn’t at full strength, everyone else was going on a fun outing and I would be doing this solo, as no one else was interested. But, I had been thinking about taking a surfing lesson and I had told my surfing neighbor (who ultimately became my husband) that I was going to take a lesson and that made me feel accountable. During the lesson, I fell countless times, I scraped my knee and sometimes even got to the point where I was able to ride a wave while kneeling on the board. Then, I stood, and rode, and didn’t fall off. It was glorious and totally worth every fall, and the skin missing from my leg. When I finally fell off the board, I rose out of the water with a victorious yell! It is this that I must remember – it is a journey but it can only happen if I Imagine, Innovate AND Act.

Happy and wordy 2018 to you! Please share with me – what are your words for 2018?

Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Fare Thee Well!

IMG_1800

“2017 was an intense year”. That’s the news alert that I received on 26 December. You’re not kidding me! – that was my response. This year has been a more challenging year than I expected it to be. Last year, I decided to do a year in review. Looking back helped me think more about my plans for the future. I have decided to do the same thing again. It is important to take stock. Without that, how can one think about the future?

As the year began, I decided to deal with minor health issues that turned out to be way more tedious and drawn out than I ever expected. Something that I thought would not take much time at all ended up lasting through July. What a drag. A trip that my husband and I had been planning, to visit my grandmother, was postponed. Then, on 10 June, my grandmother passed away. It was devastating news and made more so because, being in the midst of my own treatments, I could not travel for her funeral. The silver lining in this was that I discovered something I had never known. My family in Zimbabwe shared the above photo and I was stunned to see just how much I look like my grandmother.

Despite the challenges that came with the new year, I was honored and excited to be an instrumental part of a new committee with the New York State Society of CPAs – the Diversity & Inclusion Committee. It has been an eye-opening and insightful year, working to provide programming to our members to improve diversity & inclusion in our profession and to have frank and enlightening discussions and events around the topic. I have had fun times with members and those who have attended events and I like to think that, one little step at a time, we are making progress.

I have continued with the cello lessons that I started a year ago. I have woken up on Saturday mornings, exhausted after a long week at work, drained and not looking forward to the long drive back to downtown Brooklyn and the horror that is looking for a parking spot. However, once I get into class, I find joy. Our cello instructor started an adult orchestra and I have already had two recitals. A year ago I was learning how to play “Twinkle, Twinkle” and that was an important milestone. A couple of weeks ago, our orchestra played the theme to Jurassic Park AND I played a solo!! I’m no Yo-yo Ma (and never plan to be) but I always welcome the opportunity to work my brain and heart in new ways. I believe it makes me a better person, a happier person and a much better CPA!

I have continued to be inspired by high school and college students. These interactions renew my energy to work to build the pipeline to our profession – there is so much incredible talent out there and some of that talent should be a part of our profession. I speak with young people who are full of passion and promise and it fills me with joy!

I spoke at the AICPA’s Forensic & Valuation Services Conference. I met an incredible range of fellow professionals and came away feeling as though my brain had expanded a little bit. Every year, I look forward to sharing thoughts and insights and learning from Forensic & Valuation professionals and this year did not disappoint.

During the year, something I struggled to do was run. A couple of years ago, while taking out the trash, I tripped over a concrete block in my parking lot and fell, hard. I fell hard enough to fracture my leg and spent several months in a brace. As I failed to make a comeback, I went to see a doctor and found out that I had a torn meniscus. I closed out the year a procedure to fix the meniscus. That is all sorted out, but it turns out that, through that fall, where I wasn’t even running away from a rabid raccoon, I managed to do more damage to my knee that may need to be sorted out. The sad part of this is that I have been told to give up running. Honestly, I was gutted. Running has become a large part of who I am. My runs are my quiet time, they are my meditation and my medication. I have run through a Times Square that is cleared of traffic and pretended that I am trying to escape zombies. I have run through all five boroughs of New York City, during the marathon, and found delight and strength from those lining the route. To be told, “no more” is a difficult thing to swallow. I keep faith that I shall find new adventures and hold the secret (not so much now) hope in my heart that I shall run again.

  • I skated in Bryant Park and even let go of the railing!
  • I spent time with friends and family at the beach (I live here now!)
  • I went to an interactive screening of The Big Lebowski. There were a lot of bathrobes and even more spandex.
  • I have met new people who have made my life better.
  • I continue to be extremely grateful for all those I have known, who have given me hope, joy and support, sometimes even when they don’t realize they are doing so.

Yes, 2017 was a year with pain and disappointment but 2017 was also a year of inspiration and joy and it is important to see the progress that we have made, the work that has been done and the relationships that have been formed and built upon. I am ready for next year because I know I have great things to carry forward with me.

It is two days before 2018 – a year that will bring the Winter Olympics and the FIFA World Cup! I already have three words for 2018 – Bring It On!!!

Tagged , , , , , , , ,

Oh, Not So Much Fun…

ice-sculpture-1935357_1920

On Christmas day, I was chatting with my niece, during family celebrations. My phone buzzed and I saw a notification that she had just sent me a message. That was truly odd, because, as I mentioned, we were chatting and, unless she was using her telepathic skills, she was not texting at the same time. Nevertheless, I asked her if she had sent me a message. She looked at me as though I had lost my mind, but double checked her phone and shrugged. It wasn’t me, she said and carried on with her day. Since she was engaging with people and not her phone, and because we were having a fun time with family, I decided that the likely bad news could wait.

I attended a talk earlier in the year where the speaker told us – There are two types of people: those who have been hacked, and those that don’t know it yet. By the time we got home, my niece had gone from being in the latter group to being a panicked person in the former. Often, a person finds out that they have been hacked when, as happened to my niece, their contacts complain about spam messages that they have received from that person. However, more and more often, people don’t know that they have effectively been hacked because the party hacked is a company that is holding people’s information.

In 2017, the most notorious example was, on 17 September, when the credit reporting agency, Equifax was hacked. Initially, the information was that about 143 million people might have been impacted. However, that number has climbed and what kind of information was accessed was vague. When people tried to check with Equifax, they often got different responses each time that they tried. Also, as the months have gone by, the number of people impacted has climbed. If Yahoo! is anything to go by, who knows what the final count will be. The best advice to take right now, is to assume you have been impacted and to take preventative steps and, if you have not already done so, freeze your credit with all four of the major credit reporting agencies.

What is unsettling about how companies announce that they have been hacked is how long it takes for the news to come out. Equifax claimed that it discovered their breach at the end of July but they only made a public announcement in the middle of September. It was only in October 2017 that Yahoo announced that all of its accounts were hacked in 2013. That’s not a typo; they are telling us that if you had Yahoo, Flickr, Tumblr, or any other account owned by Yahoo, you were hacked in 2013. What is anyone supposed to do with that information, four years later? This is worse than a “Look out for falling ice” sign. In November, we found out that Uber had been hacked in 2016 and that the company had opted to pay off the hackers to destroy the information and keep the hack quiet.

The big takeaway is that it may be a while before anyone lets you know that you have been hacked and, unless you live completely off the grid, it is smart, and safe, to assume that you have been hacked. That said, there are steps that you can take to try to minimize the damage that can be caused by hacking:

  • Freeze your credit with the major credit bureaus. Learning about the Equifax breach was especially frustrating because people do not choose to share their information with the credit bureaus. I rolled my eyes at a headline that referred to “customers” being compromised. The best one can do right now (beyond not having a credit history of any kind) is to try to limit how much information gets out.
  • Check your credit regularly. Do this at least quarterly, to make sure that cards have not been opened in your name and without your permission. Annual Credit Report is the only website, authorized by federal law to provide you with a free credit report from a credit reporting agency every twelve months. A great way to spread out the checking over the year is to get a report from one of the agencies every 4 months (instead of getting all three in one fell swoop).
  • Use two factor authentication. This gives extra security over only using a password. The most common method of two factor authentication is having a company send you a text with a unique code, before you can complete logging into an account.
  • Don’t click on every link you come across. If you receive an email with a link and it is not something you have been expecting (and sometimes even if it is something you have been expecting) don’t click on a link because it is there. Check the email to make sure you recognize where the message is coming from.
  • If you trust the link and have clicked on it, still be careful about what information that you share. If you start to feel as though a company is asking for too much – either over the phone or through a website, stop sharing information. Find out, independently, if you really need to share that information and, again, make sure you know who you are sharing your information with and why.

Try to include these in your list of New Year’s resolutions. It won’t stop you from being hacked but at least, it may improve your chances of finding out about it early and taking appropriate steps.

Tagged , , , , , , , , ,

Something’s Not Right

306H

When I was just heading into my teenage years, something was not right. Not with me, but with my mother. It was unsettling for me and then miserable. It was difficult enough to be heading into my teenage years but my mother was not helping by being off.

First of all, she began to act out of character. She would come home from work and ask for a glass of water with lots of ice in it. You may not see anything wrong with that, on the face of it, but it was plenty odd because my mother never drank glasses of water with lots of ice in them. And now she wanted a glass every night. To make things even more stressful for us, each glass was closely examined and if it was not perfect – not enough ice, water somehow looked cloudy, the glass was not perfectly polished – one of us kids would have to get a new glass and make sure that it was perfect this time.

Then there was the language. My mom started using new slang. For all I know now, she may have started hanging out with a new lunch buddy and picked up some phrases from this new friend. But, along with the water, this new language mom was freaking me out. It was truly odd. But the breaking point came, for me, one Saturday morning. I was following my mother around the house and she watered and spoke to her many, many plants. This was totally in character so that gave me some comfort and was likely the reason why I was hanging about with her that morning. Then I noticed that her dress didn’t quite fit. It was tight on my mom and that was, once again, out of character for her. What was going on?

That thought was still with me as I spent time alone that afternoon. What was going on? Well, after an afternoon of pondering, I had narrowed it down to two options. Either my mother was having an affair or she had been abducted by aliens and they had left an imposter alien in her place. My two options seemed to be the only options that made sense to me at the time – I had friends at school whose parents were going through divorce. Something about our conversations made me think that divorcing parents did not act like themselves. But, if it wasn’t divorce, it could only be aliens. I blame Star Trek for getting me to believe that my mother could be abducted and a poor replica, that wasn’t quite the same size and betrayed itself with its weird speech patterns and love of ice, be left in her place. Both options were devastating for me; either way I was losing my mother and that filled me with despair. I even cried a little that afternoon.

Fortunately for my state of mind, just that week, as though she knew what was going on with me, my mother broke the news. She was pregnant (some may say I was sort of right about the alien in her body). What a relief!

It turns out that, despite all the clues that I noticed, I came to a completely wrong conclusion about what was causing the changes in my mother. Fortunately all my wrong conclusions led to was an afternoon of sadness and tears. In the work place, the consequences of taking data, red flags and other clues to incorrect conclusions can be far more costly. A classic example is that of Rita Crundwell, who defrauded the city of Dixon of over $53 million. The people who worked with her saw that she had a growing stable of quarter horses and was often traveling far and wide with these horses. They assumed that the horses paid for themselves and more and this was how she could afford to keep them. People in the horse world, who knew that horses cost more than they made, thought that she had some kind of trust fund that paid for her extravagant lifestyle. When Rita would not let anyone do her work, or even collect her mail, they thought she was being a great treasurer who diligently controlled her city’s budget. No one saw all the clues and thought she was embezzling money.

If someone was paying attention to the clues and knew how to analyze all the red flags that Rita Crundwell left in her wake, her fraud would never have lasted for the two decades that it did. If, for instance, the city had taken on the services of a forensic CPA to analyze, design and implement control systems and to help them with fraud prevention and deterrence, they may not have lost over $53 million to Crundwell.

This is an excellent reminder of how important it is to have a CPA, with experience and qualifications in financial forensics, to analyze and assess your business’s operations and finances to see what clues are there and what those clues really mean. You may notice that things are amiss, but how willing are you to accept how expensive coming to the wrong conclusion can be for you?

Tagged , , , , , , , , , , , ,

If Lost… Then What?

img_1715.jpg

At the end of May, I was on my way to an event, when a flash of pink on the sidewalk caught my attention. I stopped and realized that I was looking at a small square of leather. I bent down, picked it up and turned it over in my hands. It was a wallet with a MetroCard, some credit and debit cards and a driver’s license in it. I pulled out the license, looked it over, and walked over to the restaurant that was a few feet away from where I had just found the wallet. I must have made a few people nervous, staring at them and then down at the license, to see if anyone there resembled the photo. No luck. I then pulled out my phone and tried a few quick searches, online, to see if I could figure out how to contact this woman. Her name was more common than I imagined; several options came up and none appeared to be her. Yes, her license had an address on it but, the license had been issued several years earlier and people in New York City can move around quite a bit, in search of amenities such as a view, an elevator or affordable rent. As I was running late, I decided to go to my event and put my search off until later. On my way, I spotted a parked police car. I got excited, thinking that I may be able to hand over the wallet, but the excitement faded when I got close to the car and found that there was no one sitting in it.

When I got home and had more time to do so, I hunted down the woman whose wallet I had found and delivered it to her. Even if she had cancelled her cards, I am sure she was happy to get her stuff back – who knows maybe her MetroCard still had 29 days of use left on it. That experience reminded me of a time, years ago, when someone stole my handbag at the airport. I was livid that someone had invaded my space and even stood yelling, in the terminal, for the thief to just take my cash and give me back my stuff. Suffice to say, that did not happen. I did, fortunately, have a kind gentleman give me money to get the train back home. However, a few weeks later, my phone rang and it was the airport, calling to tell me that my bag had been found. They had been able to contact me because I happened to have a dry-cleaning slip in my wallet, and my phone number was on it. I was lucky that I had that slip in my bag but these two events really got me thinking about recovery plans, not just in business, in other aspects of our lives.

With a wallet, for instance, you can keep a business card in the wallet, or put a small card in your wallet with an email address and/or phone number so that, should you be unlucky enough to lose the wallet and a kind stranger picks it up, they can contact you and figure out how to get it back to you. It is an easy thing to do and could be hugely useful. It doesn’t even have to be your usual email address, if you have fears about your inbox being inundated by unwanted email, you can create an email address that you keep for moments such as this.

We never think that we will either lose our stuff or have it stolen from us but it can happen to any of us. It can be personal or it can be a business loss, such as a system crash, or theft and, in all cases, having a recovery plan will go a long way to make recovery less stressful and less expensive. If, at this very moment, you lost everything on your computer, what would you do? Does the thought give you heart palpitations because you would lose very important data, with no way of getting it back? Would you have to shell out a lot of money and spend valuable time working to try to recover everything? Would you wonder whether or not your business could survive such a loss? If this thought is a scary one to you, you should be thinking about sitting down with trusted professionals, to create and put a comprehensive protection and recovery plan in place. You should review various scenarios, even if you think it wouldn’t happen to you. Things to consider when doing this:

  • Are you backing up your data on a regular basis? Automating this process is a great way to make sure that it happens – you don’t want it to all depend on your remembering to do it.
  • Where are you keeping your backups? Do you keep a backup offsite and unconnected to your current system? You don’t want your backup corrupted, should your system go down.
  • Are you checking the integrity of your backups? It isn’t helpful to think you have been creating backups and find out, when you need the backup, that the process was not occurring.
  • Now that you have backups, do you have a recovery plan? Do you know what you are going to do should things go awry? Does your staff know? Do you have the plan in writing and in a space where it can be easily accessed? Have you trained your staff in this recovery process?

There are people who are well-trained in helping you create a backup and recovery plan and that can start with your CPA. You want someone who has experience and knowledge regarding best practices that are practical, useful and effective.

We are humans who work with technology that we have built and we must, therefore acknowledge that we are not infallible and we must therefore create, review and update our contingency plans. And that plan can never just be relying on the kindness of strangers.

Tagged , , , , , ,

Now That I Think About It…

408H

When we talk about fraud and how it tends to happen, the classic fraud triangle is most commonly used to help us understand how it all happens. The sides of this triangle represent opportunity, pressure and rationalization. In this triangle there is a person, just a regular old person, like you and me. Fraud can happen to anyone and fraudsters are often regular people who find themselves under pressure, faced with the opportunity to perpetrate a fraud and the ability to rationalize it all.

Sometimes this person may face pressures. Maybe she has a family member who gets sick and now they have to deal with massive bills. Maybe the person has a gambling problem. Maybe he wants to live the jet set life that he sees his friends living. Whatever the reason may be, these people feel under a lot of pressure to get their hands on more money than they are currently earning.

Pressure or not, maybe this person sees an opportunity to defraud. Perhaps he can sign checks, AND, he has custody of the checkbook AND he performs the company’s bank reconciliations. He has all this access and responsibility and no one checking his work. So, now he has access to the money and he can doctor the books to cover up his wrongdoing. However it works out, these people see a weakness that they can take advantage of.

The third leg of this triangle is rationalization. This is where a person tells himself that there is a justification for what he is doing. Maybe she tells herself that she really needs the money to deal with this one emergency and this will happen only once. Maybe she then tells herself that this will happen only once and, to boot, she has been a loyal employee for a while so the company really owes her a little leeway for all that she has done. Maybe she tells herself that once she is out of this spot of trouble, she will pay the company back and it will be like it never happened in the first place. Maybe he tells himself that he is underpaid and that what he is doing is merely taking the money that he is rightly owed for all the hard work and time that he puts into the business. The rationalizations that people use are practically endless.

Earlier this year, I listened to the podcast “Ponzi Supernova”, a podcast about Bernie Madoff’s Ponzi scheme and what has happened since. One thing that was fascinating about this series was the conversations that Steve Fishman, journalist and narrator of the series, had with Bernie Madoff, infamous perpetrator of a massive Ponzi scheme. Bernie talked about his childhood and how affected he was by his father’s financial failures. Bernie tells Steve that, after seeing his father lose a lot of money and what it did to the family, Bernie swore he would never let that happen to him (perhaps one could see this as a pressure looming over his life). In the early 1960’s, Bernie Madoff violated market regulations and his clients’ trust by losing their money on risky deals. Instead of letting them know that this had happened, he lied to his clients, borrowed money from his father-in-law and carried on as though he was a brilliant investor. Speaking with Fishman, Madoff made it sound as though, because he did not want to fail as his father had, he took these steps so that he could continue to, at least, appear to be successful and very talented.

Bernie Madoff spoke with Steve Fishman a couple of years after he was caught (though, in some versions of his story, he claims he quit). Bernie Madoff also spoke with Diana Henriques, who wrote the book The Wizard of Lies, which is now an HBO Film by the same title. Their interactions also occurred a couple of years after Madoff’s fraud was discovered. After he had plead guilty to his crime. Yet, over and over again, Madoff seemed to continue to make excuses for his behavior and try to minimize what he did. Even though, when pleading guilty, he claimed that he acted alone, he has since changed his tune and as co-conspirators have testified against him, he then seems to say, “well, except for that person, I acted alone”. So, it seems that even after being caught, he is only sharing as much of the truth as he needs to and, what I have found to be most interesting, is that he appears to continue to rationalize what he did.

In an ideal world, one would imagine that having a fraud exposed and pleading guilty would bring a fraudster to his senses. When we imagine a person committing fraud as a regular person who has fallen into irregular behavior, the hope is that putting an end to this irregular behavior will bring this person to her senses and get them to admit that what they did was without excuses; that, even though they rationalized their actions when they perpetuated the fraud, they now saw the error of their ways and realized that the rationalizations were all without merit. During the hearing when he plead guilty, Madoff read a prepared statement where he apologized to his victims. However, even that apology came with a “but” attached. “While I never promised a specific rate of return to any client, I felt compelled to satisfy my clients’ expectations, at any cost.” Yet, listening to Ponzi Supernova, you learn that some clients would demand an adjustment to their statements when they did not receive the return they had been promised. Madoff has also placed blame on his victims, claiming that they knew, or should have known, what they were getting into, that he had warned them and that they did not lose as much as they claimed. And, I have found that it is not just Madoff who does this. The Association of Certified Fraud Examiners talks to people who were convicted of fraud and, in video after video, the perpetrators found ways to hold others responsible for what they did – and this is after they had been found guilty and served their sentences. For instance, one blamed her supervisor for being too trusting, “I don’t blame them but…” she started her sentence. Another stated, “I asked you for help and you said no”, while yet another said “I won’t get caught again”, not “I won’t do it again because I realize it was wrong.

It may be human to not want to admit full responsibility. Perhaps it is too hard for most of us to admit that we have done terrible things. Who really wants to be a monster, blamed for ruining lives, even when those lives are laid out in front for you? And if we are not harshly judging ourselves, even when caught, then can we really adjust our behaviors to do right and get back on the straight and narrow? I don’t know the answers to this but it is something I think about as I perform my work as a forensic accountant. If a person is not able to strip away rationalization and admit that they were just wrong when they perpetuated their fraud, then what are the chances that it won’t be so difficult to do it again?

Tagged , , , , , , , , , , , , , , , ,

Paying It Way Forward

Bert_Mitchell

Bert N. Mitchell

Last night I attended the New York State Society of CPA’s (NYSSCPA) Moynihan Fund Gala. I was looking forward to a fun night with my colleagues, looking out on the water as the sun set and enjoying good food and drinks. What I did not expect was the incredible history lesson that I received from Lifetime Award Honoree, Bert N. Mitchell. In 1987, Mitchell became the first black president of the NYSSCPA and, during his tenure, the NYSSCPA launched the Career Opportunities in the Accounting Profession (COAP) program. I was already aware of these very impressive aspects of Bert Mitchell’s career, but, as he shared his life story, I found that these achievements were only scratching the surface.

Mitchell shared, last night, that he was the 100th black CPA in the United States. This statistic hit harder when he shared that he earned this qualification in 1965, a little more than ten years after Bernadine Coles Gines became the first black woman to become a CPA in New York and the 34th black person to become a CPA in America. Even though it was 11 years after Gines had encountered many obstacles on her journey to becoming a CPA, Mitchell did not find things to be much easier when he graduated, at the top of his accounting class, in 1963. Despite his top-notch qualifications, Mitchell spent two weeks seeking a position at one of the top accounting firms, preferably, one of the Big 8 (at the time). He travelled from lower Manhattan and worked his way to Midtown, stopping in at every major CPA firm and, over and over again, he was turned away, with the excuse that their clients’ attitudes regarding hiring a black person were why they wouldn’t give him a job. In 1968, the AICPA launched the Committee on Recruitment from Minority Groups and Mitchell was one of the five black members of the eleven member committee. A year later, in 1969, Mitchell published a study entitled “The Black Minority in the CPA Profession” and this study found that underrepresentation in the CPA profession was worse than in law, medicine and other professions. This study found that out of 100,000 CPAs in the United States, fewer than 150 were black and firms claimed, as they had to Mitchell when he was seeking employment, that the barrier to hiring African Americans was not their own bias but that of their clients.

In a follow-up to the 1969 study, Mitchell published a study in 1975 that showed that the number of black CPAs had tripled to 450. As encouraging as this information was, there was still much to and, as became apparent, Mitchell was nowhere near done. When Mitchell became president of the NYSSCPA in 1987, the stats were depressing. Black people made up almost 13% of the population, yet they made up less than one percent of CPAs. In comparison to other professions, only airline pilots had lower representation. Representation by other peoples of color was not much better – Latino representation also hovered around 1% and Asian representation was about 3%.

When I heard Bert Mitchell’s speech last night, I knew I needed to know more and when he mentioned that he was the 100th black CPA in America I, fortunately, knew exactly where to go. When I met and was moved and inspired by Bernadine Coles Gines, I went out and bought the book “A White-Collar Profession, African American Certified Public Accountants Since 1921” by Theresa A. Hammond. This book, published in 2002, tells the history of African Americans in the profession. I knew I would find him in there, not only because of the incredible work that he has done to expose people of color to the CPA profession, but also because I remembered that the book included a list of the first 100 black CPAs in the United States. I got home and there he was – “100. Bert N. Mitchell 1965 New York”.

At the Gala, as three alumni of the COAP program took to the stage and shared their stories of how the program and not only exposed them to the CPA profession but also made them believe that this was possible for them, I was deeply moved by the work and efforts of Bert N. Mitchell and others who, like him, have been dedicated to diversity and inclusion in our profession. Pick up the book, read it and learn more about Mitchell and the other first 100. This is not ancient history, it is actually amazing how recent this history is. It is hard to pass the CPA exam. It is a daily challenge to maintain the standards and knowledge that make us trusted professionals. It should never be a struggle to be hired because of your race, gender or sexual orientation. I am truly in awe, as Bert N. Mitchell, truly has dedicated his life to advocating for diversity and fairness in the profession.

Tagged , , , , ,
Advertisements