Tag Archives: the gut

Ask, Ask and Ask Again…

James Petrozzello

James Petrozzello

When I was a kid, I asked a lot of questions. Okay, I still ask a lot of questions, but, apparently, back then I really maxed out on the question asking. An aunt once said, “Everything is what, why, where, how! Don’t you know how to say a sentence that’s not a question?” I didn’t see what was wrong with that – how else was I to know the answers to the questions in my head if I did not ask them out loud? But one day someone said to me, “Hey, be careful with all those questions. Don’t you know that curiosity killed the cat?”

Well, no, I did not but that question raised a whole lot of other questions. How did the cat get killed? What was the cat curious about? What did it have to do with me? I had seen many cats in my life as, for example, my grandmother had several. However, I had never seen a cat that seemed particularly curious about anything. I did know enough to recognize, from the tone of voice, that this person did not want me asking any more questions, so the mystery of the cat’s curiosity and its ensuing death remained.

Curiosity killed the cat. This is what I have figured out since then. Do you know who says that? People who don’t want to be questioned. Do you know what kind of people those are? Those are people who are either:

  • People with huge egos who think they are too good at what they do to be questioned; or
  • People who don’t know what they’re doing and don’t want other people to know that; or
  • People who don’t want you to know what they are doing.

All three types of people are dangerous in their own ways.

The first group of people, the big egos, can be difficult to deal with, especially if those people are your supervisors. Somehow you have to convince the egos that it is in their best interest to have a check. The easy route is to become an enabler to the supervisor and to keep your head down and do as you are told. What should keep you from doing that is the thought of the consequences of your silence. Remember that usually the mistakes of people in positions of power tend to have large and far-reaching effects. Sometimes people have been doing their work for many years and believe that they are so good at what they do that no one can tell them better. You just have to find a diplomatic way of asking your questions. You know what, just because you are asking it doesn’t mean that something is wrong, it may just mean that you want to know more about what is going on.

When I worked in audit, I remember being told, a few times, to audit a section of a client’s books by following “last year’s audit papers”. I would read the work papers and sometimes I would have questions about why a particular step was taken. There were occasions when, probably because of time pressures, the audit manager would tell me to just do the work. Now, I am not saying that these managers did not know what they were doing but I will say that their reactions sure made it look as though they did not know what they were doing. As a person who feels that there are too  few hours in a day to waste them doing work for no good reason, I would insist that my questions, about why I had to do something, were answered. At times the explanations made sense and I was able to a better job, knowing what I was doing and why I was doing it. On other occasions, the conversations led to our tweaking the audit approach in order to better achieve our goal. There are times when I ask what people are doing and why they are doing it and they can’t give a reason beyond, “this is what they told me to do, so I’m doing it.” Again, talking through the work with them tends to result in work being performed at a higher level because now the people know why are doing something so they know what to look for and what results to aim for.

The last group of people, the ones who don’t want you to know what they are doing, are the slickest group of all. Their whole approach is to either make you feel as though your questions have been answered or that the explanations are so complicated that you couldn’t possibly understand. They work very hard to keep you from getting answers to their questions. Some employ the tactic of being so scary and standoffish that you don’t even want to ask them how their weekend was, let alone what they are doing and why. Others try to make their work sound super complicated and they scramble your brains with fancy words and technical terms until you say “oh right, okay” and wander off, hoping that you didn’t look too stupid in the conversation. They could also make their work sound so boring that you start to fall asleep in the middle of the second sentence of their explanation, and leave them to do what you couldn’t possibly stay awake long enough to care about. People like this are one of the reasons why frauds can go on for months or even years. They become so practiced at deception and avoiding being properly questioned about their work, that they can just keep on doing what they have been doing with virtually no fear of being caught. Their ideal environment is one where no one is asking questions.

I like to ask questions. When I am at work, one of the biggest reasons I ask questions is to help me do a better job. All too often, questions are not asked and a task ends up being performed several times over. There are times when I ask questions and I end up finding out about documents or other information that make my work much simpler. Also, I love it when I ask questions and I find out that the work has already been done, the information is available and I have time to tackle a new, unresolved issue. Don’t be afraid to ask, and ask, and ask. Your questions could make your work more productive, uncover fraud or error or just make life more interesting because you have learned something new. And, please, don’t sentence a child to years of fruitless wondering about a cat’s curiosity. Please.

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Way Outside The Box


Shock Absorber

I studied economics in college and in class we learned a lot of theories about things like supply & demand, consumption, and maximizing utility. Those lessons came with graphs and diagrams that were all very logical and pretty to look at. To know that there was an explanation for everything was both exciting and comforting. Learning that a change in the money supply would result in a provable response from the market was a powerful lesson. Everything worked just so, and followed the lines of the diagrams. The power of economics was amazing – all very logical, like a math problem (I also studied math and statistics, so I enjoyed how everything fell in place). It all made sense!

After college, I spent a few years in Zimbabwe and, during that time, I did a stint at an investment bank. I had studied various aspects of economics including micro- and macroeconomics, econometrics and neoclassical theory and so I was ready to step into my analyst position where I took market information and used it to explain and predict market activity. What I found, however, was that sometimes things worked according to the models that I created and the other times the market went rogue. When that happened I was stumped. What was wrong with the people? Why didn’t they act according to the graphs and predictions? Why weren’t they behaving in a logical manner? I wasn’t sure at times, whether to be upset with the people or with the economic theory that didn’t sufficiently warn me about the propensity of people to do what they are not supposed to do.

I left the bank to work in audit, at Deloitte. Just before I started there, an incident had occurred. A client, who was committing fraud, offered the audit manager a bribe to ignore the fraud and issue a clean audit report. When the manager refused to accept the bribe, the client tried to kill the manager. At work, my fellow employees were puzzled by this behavior – for one thing, it would have made more sense to try to bribe the audit partner, as that was who would sign off on the audit report. Was this client’s plan to kill every manager who took over the audit until he found one who was willing to not only take the bribe but also convince the audit partner that the books were fairly stated? It didn’t make sense.

I have found over the years that, unlike most of my mathematics problems, there are many incidents where human behavior does not make sense. A recent example is Scott London, a former senior KPMG partner who, although he earned a seven-figure salary, gave away insider information to his golfing buddy in exchange for a watch and jewelry that he could have bought himself and for about $50,000, cash that was small change in comparison to what he earned. He risked his career, reputation and, possibly, freedom for no good reason.

Why would he do that? It is a question that comes up just about every time a fraud is exposed. We are shocked by the lengths that people go to in order to defraud businesses and what they are willing to risk in their schemes and it is very likely that the fraudsters bank on our unwillingness to believe that anyone could do what they are doing. Often a fraud goes on for a long time because even when someone suspects that something is amiss, they cannot get their minds to go to the place the fraudster occupies. We have preconceived ideas of what a criminal is and so there are many that we don’t suspect:

  • We can’t believe that someone who has been a longtime, respected member of our community could steal from us.
  • We are stunned to discover that a friendly and fun coworker is defrauding the company.
  • In cases such as that of Rita Crundwell, the fraudster is the kind person who helps out when we are in trouble. How could that person be embezzling money?
  • The person fleecing the company could be the person who wins employee of the year awards because they put in long hours, never take vacation time and are always doing more than is expected of them.

At times, in order to see fraudulent behavior, we have to first shrug off our preconceived notions of what kind of person will commit these actions. In this way, we won’t shrug off any red flags or odd moments. Many times after a fraud is uncovered we hear people say things like:

  • He would say things sometimes and I would think maybe I heard him incorrectly;
  • I just assumed she had inherited money from a relative who had passed away;
  • When he started explaining things, he made it sound so complicated that I decided maybe I thought something was wrong because it was too difficult for me to understand.

Humans are odd creatures. We have the power of choice and sometimes that means that a person will make a choice that is absolutely illogical to you. For instance women will wear shoes that break their bones and disfigure their feet and, not only will they wear these shoes, but they will also play hundreds of dollars, sometimes thousands, for these foot-deforming shoes. For many, there is no good reason to destroy your feet in the name of cute shoes but for many others it makes enough sense for them to do it. I know this as a runner who has seen how wrecked we look at the end of a race – bleeding body parts, hobbling, missing toenails – and yet how absolutely triumphant we are. We often don’t make sense.

At times when things pop up that we don’t make sense, we need to be able to keep from thinking that the error is with us. Instead of creating explanations that make sense to us, at times it is important to step outside our boxes and open our minds to the possibility of the unimaginable. If it appears off, it may well actually be off and not be your imagination. It turns out that no one is too smart, too rich or too nice to commit fraud.

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A Little Secret Is Okay


We live in an age of information and that’s generally a great and amazing thing. Pretty much wherever I go, I can access sports scores or be that obnoxious person who brings Google in to resolve a debate. Sometimes the age of information is not so great, like when the internet convinces me that the itchy throat I have may kill me. That information is so easy to come by and that we humans are social animals may contribute to how willing people are to share the information that they have. When that sharing leads me to a new, delicious and easy way to prepare the mountains of kale in my refrigerator, then that is fantastic. There are, however, moments when it makes sense to keep some information to myself.

The other day a friend of mine asked me for my opinion on sharing information with a person she does not know well. This person owes my friend money and, instead of sending a check, asked for my friend’s bank information so she could just wire the information. She asked  me because she did not have a warm and fuzzy feeling about sending this information out and I told her that she should go with her gut. It is the same sort of concept as when someone sends you an email telling you that you have won a million dollars in a lottery that you never bought tickets for. In order for you to receive these incredible winnings, the email will say, you should send them information, including your bank information, so that they can wire this money straight into your account. More often, what happens in these cases is that fraudsters will take money out of your account instead of any lottery (that you never entered) putting money into your account.

Granted, banks have many controls in their systems to help protect customers from fraud but it is smart to be proactive about safeguarding your money. You don’t want to end up reacting and working hard to try to get back money that has been taken out of your account. Granted, when you write a check out to someone, your bank account and routing number are listed at the bottom of the check. However, I would think that you have some kind of idea who you are writing the check out to and the check will have some information about who presented that check for payment. Either way, you should never feel pushed into using a form of payment that you are not comfortable with – if there is personal information that you don’t want to share with someone, and your bank account certainly counts as personal information, it is absolutely fine to keep it to yourself. Tell that person to use Paypal, QuickPay, send you a money order or just that check you asked for in the first place. These alternate payment methods that don’t involve sharing any of your bank information were made for people like us who don’t always feel like putting it all out there.

Generally, if there is a lack of trust when it comes to your money, go with what makes you feel warmest and fuzziest. Also, since wires cost a lot more (for both the sender and receiver) than putting a check in the mail, it may make sense to go with what costs you the least. You know, “just because you’re paranoid doesn’t mean they aren’t after you“. Keep your gut happy.

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You Better Think


I just spent the last two weeks in Zimbabwe and Mozambique. I was over there to have a wedding and then go on honeymoon. Before I left the United States, I decided that I would get a prepaid line in Zimbabwe, with roaming capabilities in Mozambique. In this way. I would have a way to communicate while traveling. We went in to the phone store to purchase a line and air time and that, in and of itself, was a tale to tell. We came out of the store with almost no idea what we had. After telling the cashier in the phone store what we wanted to use our line for, she suggested that we buy $20 in air time and sent us on our way. We had no idea how much time we could spend on the phone, what the roaming rates would be while we were in Mozambique and we had no clue what was going on with our data. As a long time cellphone user, I was pretty sure that I could figure it all out.

Well, it turns out that sometimes a new system can be more complicated than one can imagine. I realized, pretty quickly, that I would have done well to have received an instruction manual or some basic training. I would have tried to search for information online, except I had no idea how to activate my data. After figuring out how to convert some of my air time minutes into data, I made a call to customer service to receive instructions on how to actually activate data on my phone. After a second call, I actually got data to work but I had no idea how to track my data use, how much data I was using or how much data I had left to use. The data availability was very erratic; sometimes I had it and then, randomly, it would be gone. When I asked a friend, who has recently moved to Zimbabwe, how it all worked he said that he couldn’t understand any of it. So I decided to enjoy my vacation, appreciate any data I did get and not sweat the stretches of time when I had no data at all.

Because we were moving around a lot, we also had very limited access to wi-fi. As a result, we spent a very lo-tech fortnight. Because I could not always get the internet to work, I was never able to Google anything. I was forced to remember what I had learnt about something or to perhaps wonder whether I had learnt it at all. It turns out that the people we spent time with also had a very different relationship with the internet than I have been accustomed to. Not once during the two weeks we were in Southern Africa did a person consult Google during a discussion. Conversations were very interesting – a group of five people could end up with five very different recollections of an event – what happened, who was involved, what the outcome was and what was behind the action. These conversations would be fascinating because as a listener, I would have to decide, all by myself, what to believe. Without access to the convenience of an internet search, I had to think things through and choose whether to be analytical or emotional when coming to some conclusions (or at least how to balance my approach). It was fun and refreshing to give my brain this workout and it also led to some very exciting and, sometimes, very funny conversations.

Though I return to my easy (and, at times, lazy) access to internet information, I hope that I do not forget the lessons of my brain exercise. I really do appreciate the reminder that it is important to unplug at times and take time to listen, think and work things out. Having technology is incredibly useful and beneficial but one must not depend on technology at the expense of processing information and reaching conclusions using our brains. This is a vital thing to remember, especially is this age of big data. Having a lot of data and not knowing how to use it, what questions to ask of it or what it all really means is as useful as not having any information at all – at times it may even be more dangerous.

I am very happy to be able to get data at the touch of a button but I am also glad to be reminded to use my head more, ask questions and consider my possible answers.

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Look Out Now!


A friend of mine, who works at a law firm, called to tell me about several clients who had come into the law offices in a panic. While searching for information online, they had clicked on a link. Instead of bringing up the search result they expected, pornography popped up on their computer screens. Moments later, before they had time to react to the unexpected images on their computers, their computers froze and the image above appeared. According to the notice, the Department of Justice had suspended their computers “on the grounds of the violation of the law of the United States of America”. To unlock their computers and “avoid other legal consequences”, the screen read, each one of these people was to pay a “release fee” of $300. Apart from the terrible grammar in the notice, there are several red flags to look out for, in order to protect yourself from scams like this:

  • If the Department of Justice suspects you of breaking the law, either by viewing child pornography, using illicit software or anything else, for that matter, they will not send you an online notice. They will show up at your door.
  • If the Department of Justice believes that you are breaking the law, they will not ask for a payoff so they don’t investigate the alleged crime. That type of behavior is commonly recognized as bribery and that in itself is not legal.
  • Just because a website posts pictures of a camera and microphone, informing you that both are on and recording you, it does not automatically mean that you are being recorded. It is important to realize that if you do not have a camera or microphone on your machine, there is no way for anyone to record you. Generally, too, especially with the video recorders on machines, there are lights and other indicators to show that they are on and recording.
  • There is no such thing as the Department for the Fight Against Cyberactivity. The first signal that this is not a real department is that Cyberactivity is not a real word. It is also a department that has never been mentioned by any government official. If you receive a notice and it refers to a government department that you are not familiar with, a search of the usa.gov directory of U.S. government departments and agencies will help you determine if the department is real or made up.
  • If any department or agency of the United States government requires you to pay a fine, it will never ever tell you to pay it via MoneyPak at your local Walmart, pharmacy or 7-Eleven. Never. Payments to government departments and agencies are made directly to the department or agency in question. For example, when you pay your taxes, you pay them to the Internal Revenue Service and when you pay for your driver’s license, you pay that money to the Department of Motor Vehicles. Never follow instructions to pay via MoneyPak, a wire to a provided account number or anything other than a valid government website. If you are unsure whether a notice is real, do not click on the link provided. Instead, open your own website and type in the department’s web address yourself. In this way, you avoid clicking on a link that may take you to a fake website.

If you are a victim of a crime like this, you should report it to the FBI or to the Internet Crime Complaint Center (IC3). In this way, the government is made aware of the scam and can go about warning people and trying to track down the perpetrators. Also, it is important to keep your computer operating systems and software up to date. This helps prevent attacks on your machine. Finally, should your machine be attacked, even with updated systems and software, contact a reputable computer repair expert as your machine may be infected with a virus that will seek personal information on your machine. This personal information may then be used to commit credit card or other financial fraud.

It may seem like a lot but taking these small steps and remaining aware and alert can go a long way to keeping you from being attacked and keeping your money in your pocket should some nefarious party try to take it.

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Mind the Gut


I was watching an episode of Bones the other day, whose title character is Dr. Temperance “Bones” Brennan, a forensic anthropologist. On this show, Dr. Brennan is pretty much always pushing the power of evidence and science. When members of her team try to jump to conclusions, she berates them and insists that they must follow the evidence. Even when she is asked by those wishing to quickly find someone to blame for a crime, she brushes them aside and tells them that they must wait until she has gathered adequate information to form an opinion.

The episode I was watching was different from the usual. In this episode, Dr. Brennan decides to follow her gut and find the evidence to prove her case. This got me thinking about the the work that a forensic accountant does, as these things tend to do. When a forensic accountant is called in to work on a case, it is very important to balance evidence and intuition (the gut).

It is very important to be attuned to what is going on around us and to take note of red flags that indicate that there may be fraud or some other misdeed. Common examples of red flags in a financial arena are an employee living beyond their apparent means (the administrative assistant who just bought a Porsche) or the unapproachable coworker who never takes a vacation (no one checks his work). When reading about cases of fraud that have gone on for several years, I often wonder why people did not heed the signs. “Didn’t anyone wonder where she got the money for her expensive clothes and bags,” I have exclaimed at the radio and whomever is around. “So, this guy was the only person who knew how to process the payments and no one ever checked his work?” I say this but I also understand that, when in a situation, it is often easy to ignore or explain away the red flags. As a forensic accountant, it is vital to the job to be aware and sensitive to these signs.

That said, it is equally important (if not more so) to gather and analyze data. The gut feelings should help give the forensic accountant direction in the investigation. However, the forensic accountant cannot reach conclusions based on gut feelings. The conclusions reached by a forensic accountant must be suitable for a court of law (which is what forensic means) and, thus far, gut feelings are not considered suitable.

On Bones, Dr. Brennan did gather the evidence required to nab her suspect. Her gut was right and served to keep her dogged in her search for facts and the truth. And that is what being a forensic professional is about, after all.

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