financial orchestra - picpa middle east conference

Case%Study:%%

Nick%Leeson%%

Changing'Signature'

Case%Study:%Nick%Leeson%%

•  Leeson%did%an%unauthorized%specula8ve%trading%that%Bankrupted%the%233>year%old%Barings%Bank%of%London%

•  Losses%eventually%reached%£827%million%%

%%%%(US$1.4%billion)%

Playing%the%%

Forecas8ng%Game%%

using%Hockey%S8cks%%

Profit is an Estimate '

Assumptions (What music notes to include) Estimates (Where to include) '

You may assume that they$re accurate down to the last dollar. Not true! The balance in the cash account is exact, but virtually every other number you see in a financial report is based on an estimate. '

Increase Revenue(Revenue Recognition)

Round&Trip&Recipe&&

Company% Vender%

Pre>Paid%Services%4%Million%%

Current%Revenue%1%Million%%%

Reporting&more&revenue&&

Deferral&of&Revenue&Recipe&&

Customer%

Balance%Sheet%

Unearned%Revenue%%2%Million%

1%M

illion%

Manipulating&revenue&&Current%Revenue%%

- Sold equipment on four-year leases, including service and maintenance. - Booked all the revenues up front. - Xerox mis-stated four years' worth of profits, resulting in an overstatement of close to $6bn.

Reduce Expenses(Matching Principle)

Capitalize&Expenses&Recipe&&

Expenses%Balance%Sheet%

Capital%8%Million%

8%Million%

Income%Satement%%

Expenses%

- Took a pretax charge -a one-time write off- of 3.54 billion against its earnings

- Grow rapidly by buying other garbage companies. But didn't know to run them. - Changed the depreciation of their 20,000 tracks from 8-10 years to 12-15 years and did the same for their 1.5 million dumpsters

�" �� !�� "�� " �� !

�� " �� " �� !�� " �� !

Underreporting #line costs$ (interconnection expenses with other telecommunication companies) by capitalizing these costs on the balance sheet rather than properly expensing them.

� ��!!

Who controls your organization? '

Are the accountants making the right judgment decisions? '

$115,000%in%Expenses%for%one%year%

-  Absolute%Trust%

-  No%Review%%

-  No%Details%

-  No%Suppor8ng%Documents%

-  No%control%%%

%

55'

Tools%Used%

%in%Fraud%%

Examina8on%

T'

Observa4on'

Opportunity%

Pressure% Ra8onaliza8on%

Fraud%%

Triangle%

Fraud%is%all%about%decep8on…%%

Occupa8onal%Fraud%and%Abuse%

Asset''

Misappropria4ons'Corrup4on'

Fraudulent'

Statements'

Conflicts of Interest

Bribery

Illegal Gratuities

Economic Extortion

Inventory & All Other Assets

Cash

Nonfinancial

Financial

Inves8ga8on%Strategy%

Catching%large%fraud%…%

Goodner%%

Brother%%

Meet%Mr.%Woody%

Goodner%Brother%%

•  Selling'Tires'on'the'Sly'•  Visit'a'remote'storage'site'

•  Searched'for'set'of'4res'that'siAng'for'a'while'in'the'storage'

and'started'collec4ng'dust'

•  He'took'the'specifica4ons'of'the'set'of'4res'and'started'lis4ng'

customers'who'could'poten4ally'

find'some'use'of'them'

Goodner%Brother%%

•  Later'that'day'Woody'convinced'a'

local'plumping'supply'dealer'that'

needed'4res'for'his'small'fleet'of'

vehicles''

•  He'told'him'that'the'company'is'

moving'some'old'inventory'and'that'

inventory'will'be'sold'on'cash'basis''

•  The'owner'agree'and'woody'deliver'the'4res'to'him'and'got'$900'

Goodner'Brother''

•  He'keep'doing'this'for'2'years''•  He'will'charge'some'orders'to'accounts'with'

large'volume'of'sales.'When'some'of'them'

complained,'Woody'will'change'it.'If'they'don’t'

complain.'They'will'pay'of'it'and'help'him'cover'

his'fraud.''

•  He'was'then'selling'most'of'the'inventory'to'

his'friend.'

What%can%you%do%with%

more%money?%

Fraud&examination&is#a#methodology#developed#by#ACFE#for#resolving#fraud#allegations#from#inception#to#disposition,#including#obtaining#evidence,#interviewing,#writing#reports,#testifying#to#<indings,#and#assisting#in#the#detection#and#prevention#of#fraud.##

OpenThinking%is%an%%

ACFE%Authorized%

Trainer%in%the%%

UAE%and%Qatar%%

Fraud%Examiner%%%%%%%

&&&&&Lawyer&&&&&&&&&&&&&&&&&&&&&&&&&&Accountant&&&&&

Criminologist&&&&&&&&&&&&&&&&&Investigator&&#

###1.  Be#an#Associate#member#of#the#ACFE#in#good#standing.###2.  Submit#the#CFE#Exam#application#with#proof#of#education#and#

professional#recommendations.####3.  Prepare#for#the#CFE#Exam###4.  Pass#the#CFE#Exam.###5.  Gain#<inal#approval#from#the#certi<ication###########################committee#and#

become#a#CFE.###

Cer8fied%Fraud%Examiner%(CFE)%

&&&!  10&hours&to&complete&the&CFE&Exam.&&

!  Each&section&is&allocated&a&maximum&of&2.6&hours&to&complete.&&

!  Each&of&the&four&exam&sections&has&125&questions.&

!  You&will&have&a&maximum&of&75&seconds&to&answer&each&question.&

!  You&have&30&days&to&complete&all&four&sections&of&the&CFE&Exam.&

!  You&must&complete&each&section&in&one&sitting.&&


###•  Fraud Prevention and Deterrence

•  Financial Transactions

•  Fraud Investigation

•  Legal Elements of Fraud


###Get Certified

Registra8on%&%Fees%for%2014%Course:%%%%%%%%%%

Early'Registra4on'Deadline:'Nov'1,'2014'''

Packages'star4ng'at'$3,370.'Register'by'

the'Early'Registra4on'Deadline'to'SAVE'an'

addi4onal'$880!''

Dubai,%UAE%%

Dec%14%–%18,%2014%/%Feb%22%–%26,%2015%

For%the%first%8me%in%the%UAE.%%

Arjaan%Rotana%Dubai%Media%City,%

Dubai,%UAE%

" 5'Full'Training'Days'

" ACFE'Training'Materials'and'Slides'

"  'Annual'Associate'Membership'($95.00)'

"  '2014'CFE'Exam'Prep'Course'($945)'

" 30'CPEs'Cer4ficate'from'the'ACFE'

'

Fees%of%the%course%include:%

CFE Exam Review Course

Dubai, UAE: Dec 14 - Dec 18, 2014 / Dubai, UAE: Feb 22 - Feb 26, 2015

eludehcS DAY 1Sunday

DAY 2Monday

DAY 3Tuesday

DAY 4Wednesda,

7:30-8:00 a.m. Registration and continental breakfast

Continental breakfast Continental breakfast Continental breakfast

8:00-9:20 a.m. Introduction

• Interview Theory and Application

Law Related to Fraud

•

Overview of the U.S. Legal System

•

Legal Rights of Employees

Financial Transactions and Fraud Schemes

•

Cash Receipts

•

Theft of Intellectual Property

•

Consumer Fraud

Fraud Prevention and Deterrence

•

Understanding Behavior

•

White-Collar Crime

9:20-9:35 a.m. Break

9:35-10:55 a.m. Investigation Techniques

• Interview Theory and Application (cont.)


•

Criminal Prosecutions for Fraud

•

Evidence


•

Inventory and Other Assets

•

Financial Institution Fraud

•

Health Care Fraud

•

Insurance Fraud


•

Management Responsibilities

•

Auditors Responsibilities

10:55-11:10 a.m. Break

11:10 a.m.-12:30 p.m.

Investigation Techniques

• Planning the Investigation

• Data Analysis and Reporting Tools

• Analyzing Documents


•


•

Testifying as an Expert


•

Computer and Internet Fraud

•

Bribery and Corruption

•

Procurement Fraud


•

Fraud Prevention Programs

•

ACFE Code of Professional Ethics

12:30-1:30 p.m. Group lunch Group lunch Group lunch

1:30-3:00 p.m. Investigation Techniques

• Tracing Illicit Transactions

• Reporting Standards


•

Civil Justice System

•

Securities Fraud

•

Money Laundering


•

Accounting Concepts

•

Financial Statement Fraud


•

Fraud Risk Assessment

•

Fraud Risk Management


•

Sources of Information

•

Computer Forensics

•

Covert Examinations


•

Money Laundering (cont.)

•

Bankruptcy Fraud

•

Tax Fraud


•

Fraudulent Disbursements

•

Check and Credit Card Fraud

ACFE.com/CERCGuide

DAY 5Thursday

Fraud Prevention and Deterrence• Corporate Governance

Group lunch Group lunch

Continental breakfast

CFE Exam Review CourseCFE Exam Review Course



DAY 2Monday

DAY 3Tuesday

DAY 4Wednesda,






•


•



•

Cash Receipts

•


•

Consumer Fraud


•


•

White-Collar Crime

9:20-9:35 a.m. Break




•


•

Evidence


•


•


•

Health Care Fraud

•

Insurance Fraud


•


•


10:55-11:10 a.m. Break

11:10 a.m.-12:30 p.m.






•


•



•


•


•

Procurement Fraud


•


•







•


•

Securities Fraud

•

Money Laundering


•

Accounting Concepts

•



•


•



•


•

Computer Forensics

•

Covert Examinations


•


•

Bankruptcy Fraud

•

Tax Fraud


•


•


ACFE.com/CERCGuide

DAY 5Thursday








DAY 2Monday

DAY 3Tuesday

DAY 4Wednesda,






•


•



•

Cash Receipts

•


•

Consumer Fraud


•


•

White-Collar Crime

9:20-9:35 a.m. Break




•


•

Evidence


•


•


•

Health Care Fraud

•

Insurance Fraud


•


•


10:55-11:10 a.m. Break

11:10 a.m.-12:30 p.m.






•


•



•


•


•

Procurement Fraud


•


•







•


•

Securities Fraud

•

Money Laundering


•

Accounting Concepts

•



•


•



•


•

Computer Forensics

•

Covert Examinations


•


•

Bankruptcy Fraud

•

Tax Fraud


•


•


ACFE.com/CERCGuide

DAY 5Thursday




CFE Exam Review CourseCFE Exam Review Course



DAY 2Monday

DAY 3Tuesday

DAY 4Wednesda,






•


•



•

Cash Receipts

•


•

Consumer Fraud


•


•

White-Collar Crime

9:20-9:35 a.m. Break




•


•

Evidence


•


•


•

Health Care Fraud

•

Insurance Fraud


•


•


10:55-11:10 a.m. Break

11:10 a.m.-12:30 p.m.






•


•



•


•


•

Procurement Fraud


•


•







•


•

Securities Fraud

•

Money Laundering


•

Accounting Concepts

•



•


•



•


•

Computer Forensics

•

Covert Examinations


•


•

Bankruptcy Fraud

•

Tax Fraud


•


•


ACFE.com/CERCGuide

DAY 5Thursday





financial orchestra - picpa middle east conference

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