Tag Archives: Attestation Update

Oh Yes, She Did!

james_ano_silly

In previous posts, when talking about the importance of controls in a system to help prevent fraud, I discussed the case of Amy Wilson. These posts were specifically about how trust is not a control. Regardless of how nice a person seems to be (or is) or how long someone has worked for you, you should never decide that you can trust them enough to forgo system controls. It really cannot be said enough, trust is not a control. It does not matter how good a person is or how long they have worked without ever considering defrauding their employer, there may come a time when they face great pressure to commit fraud. It is important that, should this time arise, there are controls that deter them from giving in to temptation.

In my first post about Amy Wilson, I discussed how many controls I come across when I run a race compared to how few controls I have seen in many businesses. I continue to be amazed by this; people will put so much into making sure folk aren’t fabricating their running times, yet they are willing to trust those very same folk with their money and assets. The second time I wrote about Amy Wilson, I had watched her enlightening interview on the Attestation Update website. Here and in the articles she has authored, Amy Wilson speaks very clearly about what she did and how she could either have been caught or have never had the opportunity to perpetrate the fraud.

Well, fast forward to today. I received notification, this morning, that Amy Wilson had visited my website and left me a comment. She was very complimentary (whew!). I am glad because Ms. Wilson does have great lessons to impart and I appreciate that she does not take issue with how I have shared her story and lessons. To have real life examples of where the weaknesses in a system were, how they were exploited and the ultimate consequences of all of this is absolutely priceless. When it comes to designing and instituting controls in a financial system, it is imperative that this is performed effectively and consistently. In order to make sure that this process is correctly implemented, the stories must be told clearly, correctly and honestly. It is fantastic that Ms. Wilson is unflinching when she talks about what she did; that kind of thing does not happen often. This kind of honesty helps forensic accountants get better at what they do and, hopefully, businesses get better at deterring, preventing and detecting fraud. Finally, feedback like Amy Wilson’s helps me feel happier about what I do.

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How Are You Confirming Your “Facts”?

Journalist falling for teen claiming M in stock market profits is object lesson for auditors

Journalist falling for teen claiming $72M in stock market profits is object lesson for auditors.

Attestation Update just wrote about a recent hoax, where a teenager claimed to have made $72 million, trading on the stock market. This article got me thinking about a piece I wrote last year on professional skepticism and the importance of knowing who is confirming your information. The least reliable confirmation comes from the party making the claim, in this case, the alleged millionaire teenager. The journalist that he dealt with thought that the bank statement that the teenager showed her was a valid third party confirmation. This is a very easy assumption to make. It appears that the party is coming from a third party, so it is easy to see that as a third, independent, party confirmation. This, however is not the case. In order for a confirmation to be truly independent, the person making the claim cannot have any control over the confirmation process. As we have seen here and in the cases noted by James Ulvog, it is very easy for someone to hand you a fake document that looks very real. There are actually places that will create very realistic fakes for you, for a price, of course.

Ulvog also pointed out several red flags in the boy’s story. An auditor or forensic CPA, coming across these red flags, should seek to further investigate and seek independent confirmation of the claims. For example, there are age restrictions that make it illegal for minors to buy and sell securities. You should look at the piece at Attestation Update and see if you can determine why the items highlighted by Ulvog are red flags. This piece also underlines the importance of using diligent and qualified professionals. It also emphasizes how we, as professionals must consistently practice professional skepticism and be aware of what are truly third party confirmations and how important it is to make them.

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From The Horse’s Mouth

Mister-Ed-Talking-HorseEarly last year, I wrote about Amy Wilson and the lack of controls that existed in the company that she stole from. The complete lack of controls and reliance on trust gave her the opportunity to steal from the company, which she did… for four years. She was actually caught by the fraud department at the credit card company, not by her employers. Anyway, I am talking about her because Jim Ulvog has an excellent post on his website, Attestation Update. Here, Amy Wilson tells us about her fraud, how she was caught and how she got away with things for as long as she did. It is an excellent watch and a great reminder of the very wise words – “trust, but verify.”

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