Have you ever desired to become a fraud prevention champion? In this half-day course, we will peer into real-life governmental fraud cases and see how they occurred. You will leave the class with practical fraud prevention steps for any national, state or local government. The course location is the Capital Hilton Hotel in Washington DC.

Date:August 9, 2017
Time:8:00-11:35 a.m.
Event:Charles Hall Speaking at AICPA Governmental Accounting and Auditing Update Conference
Topic:How to Become a Super Fraud-Prevention Champion
Sponsor: AICPA
Public:Public
Registration:Click here to register.

Do You Need to Verify that Someone is a CPA?

Do you need to verify that someone is a CPA?

If yes, click here for CPAVerify.org.

Their website says:

Free and open to the public, CPAverify.org is a CPA lookup tool populated by official state regulatory data sent from Boards of Accountancy to a central database. The website represents the first ever single-source national database of licensed CPAs and CPA firms. Determine a CPA or CPA firm’s credentials without having to search each of the 55 Boards of Accountancy website individually.

Peer Review Inherent Risk Questions Revised

Separate inherent risk assessments are not required by GAAS; however, changes to peer review checklists (several months ago) were causing “no” answers (which implies a deficiency) when audit firms did not use separate practice aids to assess inherent risk.

These “no” answers were an unintended consequence of the way the peer review inherent risk questions were worded. (I scratched my head the first time I saw them.) The questions are now revised.

Now the peer reviewer will focus on the risk assessments related to the risk of material misstatement (RMM) (which is the result of the control risk and the inherent risk). The revised questions still ask the reviewer to consider if the RMM is impacted by a less-than-high inherent risk assessment.

The intent of the inherent risk questions, I believe, is to cause the reviewer to consider whether the inherent risk assessment is appropriate and not used to falsely reduce the amount of substantive work.

Remember Inherent Risk x Control Risk = RMM, so an auditor could lessen his response to risk (substantive work) by lowering the inherent risk (without a proper basis for doing so).

What does this mean for you? Make sure you can defend your lower inherent risk assessments (provide a logical explanation for the lower IR assessment).

Key Highlights from the 2016 Fraud Survey: Association of Certified Fraud Examiners

The Association of Certified Fraud Examiners conducts a biennial fraud survey titled Report to the Nations on Occupational Fraud and Abuse.

Fraud Survey

Picture from AdobeStock.com

Key Fraud Survey Statistics

Here are some statistics from the 2016 report:

  • The most common detection method is tips — 39% of fraud was detected by tips
  • The median loss per fraud case is $150,000
  • 41% of fraud cases are not referred to law enforcement (mainly due to fear of bad publicity)
  • The typical organization loses 5% of its revenue to fraud
  • Large organizations are more apt to use antifraud programs than small ones
  • Banking, governments and manufacturing suffer the largest losses (and in that order)
  • The average fraud exists 18 months before detection
  • Fraud schemes lasting more than 5 years caused a median loss of $850,000
  • 82% of the entities in the survey underwent audits
  • 95% of the time the fraudster took efforts to conceal the theft
  • Fraud losses increase with the number of people involved in the theft
  • Most fraudsters are first-time offenders (with only 5% having been previously convicted of theft)
  • The typical fraudster is:
    • Male (69%),
    • Middle-aged (30 to 50 years of age),
    • Educated (60% had college degrees), and
    • Works with the organization for a number of years
  • 19% of the frauds involved owners or executives resulting in median losses of $703,000
  • Only 8% of the frauds were committed by an employee with less than one year of employment
  • Billing schemes such as fictitious vendors continue to cause significant losses
  • 23% of the fraud cases were for more than $1 million dollars

See the complete ACFE survey here.

See my fraud prevention book on Amazon here.

I am looking forward to speaking the the Georgia Association of School Business Officials in Augusta, Georgia on November 8th. We’ll review a few school fraud cases and then look at how to prevent thefts in local school systems.

Date:November 8, 2016
Time:9:00 a.m. - 4:00 p.m.
Event:Charles Hall providing fraud prevention class at the Georgia Association of School Business Officials Conference
Topic:Prevention of Fraud in Local Schools
Public:Private

I will be speaking at the Georgia Government Finance Officers’ Conference on October 4, 2016. My presentation is titled “Steal Like a Boss,” a tongue-in-cheek view of how fraudsters think and act. Hope to see you there.

Date:October 4, 2016
Time:2:20 p.m.
Event:Georgia Government Finance Officers' Conference
Topic:Steal Like a Boss
Sponsor: Georgia Government Finance Officers
Venue: Evergreen Marriott Conference Resort | Stone Mountain GA
Public:Public

I am looking forward to the 2016 NAAATS Conference. Hope to see you in Salt Lake.

Date:July 21, 2016—July 22, 2016
Event:AICPA NAAATS Conference
Public:Public

The Smartest Places on Earth (2016)

For the last few decades jobs have shifted overseas to places where labor is cheaper. The book, The Smartest Places on Earth, provides evidence that the future of employment lies in collaborative efforts between universities, government agencies, and for-profit businesses.

The synergy generated in emerging hotspots–such as Raleigh-Durham, N.C.–is moving employment and profits from a production focus to one where ideas and innovation win.

The authors argue “robots, 3D printing, and the Industrial Internet” will be the driving mechanisms that transform old rustbelt communities (such as Akron, Ohio) to brainbelts. The sharing of information among the collaborative parties (universities, government agencies, businesses, nonprofits) is enabling the development of emerging technologies and never-dreamed-of products.

Click here to see the book on Amazon.

Looking for Answers to Independence Questions?

If you are looking for answers to independence questions, check out the AICPA’s Plain English Guide to Independence. Click here. This is a great resource.

I am looking forward to speaking about fraud prevention at the Tennessee County Services Association’s 2016 Legislative Conference.

Date:May 26, 2016
Event:TCSA's 2016 Legislative Conference
Sponsor: Tennessee County Services Association
Location:Gatlinburg, Tennessee
Public:Private