white collar crime: what every cpa should know
TRANSCRIPT
Dave Cotton, CPA, CFE, CGFMCotton & Company LLP
Alexandria, Virginiawww.cottoncpa.com
White Collar Crime: What Every CPA Should Know
DAVID L. COTTON, CPA, CFE, CGFM COTTON & COMPANY LLP CHAIRMAN
Dave Cotton is chairman of Cotton & Company LLP, Certified Public Accountants, headquartered in Alexandria, Virginia. The firm was founded in 1981 and has a practice concentration in assisting Federal and State government agencies, inspectors general, and government grantees and contractors with a variety of government program-related assurance and advisory services. Cotton & Company has performed grant and contract, indirect cost rate, financial statement, financial related, and performance audits for more than two dozen Federal inspectors general as well as numerous other Federal and State agencies and programs. Cotton & Company’s Federal agency audit clients have included the U.S. Government Accountability Office, U.S. Navy, U.S. Marine Corps, U.S. Transportation Command, U.S. House of Representatives, U.S. Capitol Police, U.S. Small Business Administration, U.S. Bureau of Prisons, Millennium Challenge Corporation, U.S. Marshals Service, and Bureau of Alcohol, Tobacco, Firearms and Explosives. Cotton & Company also assists numerous Federal agencies in preparing financial statements and improving financial management, accounting, and internal control systems. Dave received a BS in mechanical engineering (1971) and an MBA in management science and labor relations (1972) from Lehigh University in Bethlehem, PA. He also pursued graduate studies in accounting and auditing at the University of Chicago Graduate School of Business (1977 to 1978). He is a Certified Public Accountant (CPA), Certified Fraud Examiner (CFE), and Certified Government Financial Manager (CGFM). Dave served on the Advisory Council on Government Auditing Standards (the Council advises the United States Comptroller General on promulgation of Government Auditing Standards—GAO’s yellow book) from 2006 to 2009. He served on the Institute of Internal Auditors (IIA) Anti-Fraud Programs and Controls Task Force and co-authored Managing the Business Risk of Fraud: A Practical Guide. He served on the American Institute of CPAs Anti-Fraud Task Force and co-authored Management Override: The Achilles Heel of Fraud Prevention. Dave is the past-chair of the AICPA Federal Accounting and Auditing Subcommittee and has served on the AICPA Governmental Accounting and Auditing Committee and the Government Technical Standards Subcommittee of the AICPA Professional Ethics Executive Committee. Dave chaired the Fraud Risk Management Task Force, sponsored by COSO and ACFE and is a principal author of the COSO-ACFE Fraud Risk Management Guide. Dave served on the board of the Virginia Society of Certified Public Accountants (VSCPA) and on the VSCPA Litigation Services, Professional Ethics, Quality Review, and Governmental Accounting and Auditing Committees. He is a member of the Association of Government Accountants (AGA) and past-advisory board chairman and past-president of the AGA Northern Virginia Chapter and currently serves on the AGA Professional Ethics Board. He is also a member of the Institute of Internal Auditors and the Association of Certified Fraud Examiners (ACFE). Dave has testified as an expert in governmental accounting, auditing, and fraud issues before the United States Court of Federal Claims and other administrative and judicial bodies. Dave has spoken frequently on cost accounting, professional ethics, and auditor fraud detection responsibilities under SAS 99, Consideration of Fraud in a Financial Statement Audit. He has been an instructor for the George Washington University masters of accountancy program (Fraud Examination and Forensic Accounting), and has instructed for the George Mason University Small Business Development Center (Fundamentals of Accounting for Government Contracts). Dave was the recipient of the ACFE 2018 Certified Fraud Examiner of the Year Award (“presented to a CFE who has demonstrated outstanding achievement in the field of fraud examination … based on their contributions to the ACFE, to the profession, and to the community”); AGA’s 2012 Educator Award (“to recognize individuals who have made significant contributions to the education and training of government financial managers”); and AGA’s 2006 Barr Award (“to recognize the cumulative achievements of private sector individuals who throughout their careers have served as a role model for others and who have consistently exhibited the highest personal and professional standards”).
White Collar Crime: What Every CPA Should Know
Ø What, exactly, is white collar crime?Ø White collar crime statistics.Ø What is the CPA’s role in combatting
white collar crime?Ø Let’s examine a few (infamous) cases.
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What, Exactly, Is White Collar Crime?
"White collar crime" can describe a wide variety of crimes, but they all typically involve crime committed through deceit and motivated by financial gain. The most common white collar crimes are various types of fraud, embezzlement, tax evasion and money laundering. Many types of scams and frauds fall into the bucket of white collar crime, including Ponzi schemes and securities fraud such as insider trading. More common crimes, like insurance fraud and tax evasion, also constitute white collar crimes.
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Source: FindLaw.com
What, Exactly, Is White Collar Crime?
White collar crimes are financially motivated crimes committed by individuals, businesses, and government entities. The actual term “white collar crime” was coined by Edwin Sutherland, Professor of Sociology, 29th President American Sociological Society. Sutherland described such crimes as “a crime committed by a person of respectability and high social status in the course of his occupation.”White collar crimes cover a wide range of activities, but generally, the crimes are committed by people who are involved in otherwise lawful businesses. The perpetrators often hold respectable positions in their communities or businesses, until their illegal activities [are] discovered. The laws concerning white collar crimes vary, depending on the exact nature of the crimes committed, though many fall under federal authority.
3
Source: LegalDictionary.net
What, Exactly, Is White Collar Crime?
White-collar crime is nonviolent crime committed for financial gain. … The motivation for these crimes is to obtain or avoid losing money, property, or services, or to secure a personal or business advantage.
4
Source: Investopedia.com
What, Exactly, Is White Collar Crime?
[T]he term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage.
5
Source: FBI.gov
What, Exactly, Is White Collar Crime?
These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three). Today’s fraud schemes are more sophisticated than ever, and the FBI is dedicated to using its skills to track down the culprits and stop scams before they start.
6
Source: FBI.gov
Statistics
Fraud and other white collar crimes cost businesses and individuals
more than $400 billion each year in the U.S.
• White collar crime most commonly occurs in companies with fewer
than 100 employees
• 75% of white collar crime is committed by men
• The typical perpetrator of white collar crime is a college-educated
male of Caucasian descent
• On average, companies lose $9 or more per day, per employee due to
fraud
• Managers are responsible for four times the amount of loss than
employees
7
Source: LegalDictionary.net
Statistics
• Each year, there are around 5,000 arrests per 100,000 people in the United States for white collar crimes
• Of those arrests, 635 are related to property crimes• Bribery accounts for the fewest white-collar-crime-related arrests• Estimates show that one out of every four households will be the
subject of a white collar crime at some point in their life
8
Source: LegalDictionary.net
9
Source: 2018 ACFE Report to the Nations.
10
Source: 2018 ACFE Report to the Nations.
White collar crime encompasses
everything shown
What is the CPA’s role in combatting white collar crime?
Select the best answer(s):A. CPAs/auditors are not required to find fraud.B. Auditors are only required to provide reasonable
assurance of finding material misstatements.C. CPAs are required to serve the public interest.D. Since white collar crimes are “committed by
people who are involved in otherwise lawful businesses,” CPAs are a front line of defense.
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What is the CPA’s role in combatting white collar crime?
Would you rather:A. Find the fraud if it’s there.B. Explain why you failed to find the fraud.
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Let’s Examine A Few (Infamous) Cases
White Collar Crime and the CPA’s RoleØ Barings BankØ EnronØ WorldComØ DixonØ Madoff
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Case Study: Barings Bank and Nick Leeson
Case Study: Barings Bank and Nick Leeson
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• Nick Leeson was a 27-year-old rogue derivatives
trader in Barings’ Singapore office
• He single-handedly collapsed the 233-year-old bank
by trading with bank funds
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
Case Study: Barings Bank and Nick Leeson
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• Nick Leeson was a 27-year-old rogue derivatives
trader in Barings’ Singapore office
• He single-handedly collapsed the 233-year-old bank
by trading with bank funds
• He reported his gains (and got large bonuses as a
result); but hid his losses in a “5-eights” account
(account number 88888)
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Case Study: Barings Bank and Nick Leeson
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
• Nick Leeson was a 27-year-old rogue derivatives trader in Barings’ Singapore office
• He single-handedly collapsed the 233-year-old bank by trading with bank funds
• He reported his gains (and got large bonuses as a result); but hid his losses in a “5-eights” account (account number 88888)
• The bank collapsed in Feb. 1995
18
Case Study: Barings Bank and Nick Leeson
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
• Nick Leeson was a 27-year-old rogue derivatives trader in Barings’ Singapore office
• He single-handedly collapsed the 233-year-old bank by trading with bank funds
• He reported his gains (and got large bonuses as a result); but hid his losses in a “5-eights” account (account number 88888)
• The bank collapsed in Feb. 1995
• In Dec. 1994, account 88888 had $512 million in losses hidden in it
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Case Study: Barings Bank and Nick Leeson
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
• Among the means Nick used to conceal the losses in 88888 was “suppression” of the account in printed reports to London
• Could data analysis have saved Barings?• Simply totaling--electronically--the debits and credits in
the reports to London would have revealed the “suppression”
• Account 88888 was supposed to be a low-balance adjustment account for minor trading errors; hence, a simple stratification test would have revealed the anomaly
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Case Study: Barings Bank and Nick Leeson
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
Where were the CPAs?• Leeson knew that the auditors didn't look that hard or they
would have discovered his malfeasance. In "Rogue Trader," Leeson writes that the auditors didn't follow up on a memo regarding segregation of duties, didn't complete some basic reconciliations, and accepted fraudulent documentation. The auditors relied on "conversational auditing" - they accepted answers from Leeson, and others, at face value and didn't require proper documentation to support key issues.
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Case Study: Barings Bank and Nick Leeson
Source: The Barings Bank Case, Fraud Magazine, Sep/Oct 2002.
Where were the CPAs?• "All ... (the auditors) had to do was look at a balance sheet
during the month, and they'd see that the funding I'd received from London didn't equal the funding I'd passed into SIME," Leeson wrote.
• "The main sources of evidence were enquiries made of key managers, primarily the General Manager," he said. "Key reports and records were reviewed but no detailed testing of these records was undertaken."
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Case Study: Barings Bank and Nick Leeson
Source: The Barings Bank Case, Fraud Magazine, Sep/Oct 2002.
Where were the CPAs?• Just before the bank’s collapse, the auditors were scrambling
to meet the expected financial statement issuance date. They discovered that a key (and significant) account confirmation had not been received. They contacted Nick.
• The missing confirmation was received via fax within a few hours. The auditors put in it the workpapers and issued the audit report.
• Had the auditors looked at the confirmation more closely, they would have seen that the fax came from Nick’s apartment.
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Case Study: Barings Bank and Nick Leeson
Source: Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
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Source: 2018 ACFE Report to the Nations.
For More on Barings Bank
• Nick Leeson and Edward Whitley, Rogue Trader: How I Brought Down Barings Bank, (Boston: Little Brown & Co, 1996).
• The Barings Bank Case, Fraud Magazine, Sep/Oct 2002.
• https://www.nickleeson.com.• https://www.youtube.com/watch?v=uhrIAnbl5XE. • Rogue Trader, Starring Ewan McGregor, 1999.
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Enron (aka “the Crooked E”)
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Enron
• In the late 1990s, Enron became the 7th largest corporation in the world.
• Enron was named "America's Most Innovative Company" by the magazine Fortune for six consecutive years, from 1996 to 2001.
• Enron’s use of special purpose entities was, indeed, “innovative.”
• Enron’s accounting involved “aggressive” creation and use of SPEs to hide liabilities and losses.
27Sources: Sharp, David J. (2006). Cases in Business Ethics. Thousand Oaks, CA: SAGE. ISBN 1412909244.Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen, Barbara Ley Toffler, Broadway Books, 2003.
Enron
• On 16 October 2001 Enron reported 3rd quarter losses of $638 million and a $1.2 billion reduction in equity.
• On 31 October 2001 the SEC opened a formal investigation.
• On 2 December 2001 Enron filed for Chapter 11 bankruptcy protection.
28Sources: Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen, Barbara Ley Toffler, Broadway Books, 2003. Washington Post Newsweek Interactive.
Enron—Where Were the CPAs?
Enron's Auditors
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Enron—Where Were the CPAs?
• AA was indicted on one felony count of obstruction of justice on 14 March 2002
• On 15 June 2002, the jury returned a guilty verdict
• “For all intents and purposes, Andersen was dead”
30Sources: Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen, Barbara Ley Toffler, Broadway Books, 2003.
32
Enron—Where Were the (Good) CPAs?
Sherron Watkins, CPASource: https://www.forbes.com/2002/02/14/0214watkins.html#37fb24b432b9
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Enron—Where Were the (Good) CPAs?
Source: https://www.forbes.com/2002/02/14/0214watkins.html#37fb24b432b9
• A whistle-blower, literally speaking, is someone who spots a criminal robbing a bank and blows a whistle, alerting the police.
• What [Watkins] did was write a memo to the bank robber, suggesting he stop robbing the bank and offering ways to avoid getting caught.
• Then she met with the robber, who said he didn't believe he was robbing the bank, but said he'd investigate to find out for sure.
• Then, for all we know, Watkins did nothing, and her memo was not made public until congressional investigators released it six weeks after Enron filed for bankruptcy.
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Enron—Where Were the (Good) CPAs?
Source: http://content.time.com/time/specials/packages/0,28757,2022164,00.html
35
Source: 2018 ACFE Report to the Nations.
For More on Enron
• Sharp, David J. (2006). Cases in Business Ethics. Thousand Oaks, CA: SAGE. ISBN 1412909244.
• Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen, Barbara Ley Toffler, Broadway Books, 2003.
• https://www.forbes.com/2002/02/14/0214watkins.html#37fb24b432b9.
• http://content.time.com/time/specials/packages/0,28757,2022164,00.html.
• Enron: The Rise and Fall, Loren Fox, John Wiley & Sons, 2003• Power Failure, Mimi Schwartz and Sherron Watkins, Doubleday,
2003.• Enron: The Smartest Guys in the Room, 2005. 36
Biggest. Scandal. Ever.
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• WorldCom improperly recorded $3.3 billion in
profits from 1999 to 2002.
• That was accomplished by improperly
capitalizing $3.8 billion of operating expenses
and manipulating reserves.
• WorldCom filed for bankruptcy in July 2002.
• Sarbanes-Oxley was signed into law in July
2002.
38Sources: https://www.theguardian.com/business/2002/aug/09/corporatefraud.worldcom2’ https://www.theclever.com/the-15-largest-fraud-scandals-in-history/
• Guess who WorldCom’s auditors were …
39Sources: https://www.theguardian.com/business/2002/aug/09/corporatefraud.worldcom2’ https://www.theclever.com/the-15-largest-fraud-scandals-in-history/
—Where Were the CPAs?
40Sources: https://cynthiacooper.com
—Where Were the (Good) CPAs?
• Cooper was VP of Internal Audit.• Cooper and her team discovered the capitalization
of operating expenses and confronted CFO Scott Sullivan and Controller David Myers.
• Sullivan and Myers tried to argue that the treatment was in line with FASB requirements.
• Cooper took her concerns to the WorldCom board.
41Source: Unaccountable, Mike Brewster, John Wiley & Sons, 2003.
—Where Were the (Good) CPAs?
I’ve seen hundreds of cases of corporate fraud. Most of them are not that complicated. Take a look at WorldCom. Auditors are just not trained to see how the system can be abused.
--Joseph T. Wells
“WorldCom’s fraud was the definition of ‘not complicated.’”
42Source: Unaccountable, Mike Brewster, John Wiley & Sons, 2003.
—Where Were the (Good) CPAs?
43
Source: 2018 ACFE Report to the Nations.
For More on WorldCom
• https://www.theguardian.com/business/2002/aug/09/corporatefraud.worldcom2’.
• https://www.theclever.com/the-15-largest-fraud-scandals-in-history/.
• Unaccountable, Mike Brewster, John Wiley & Sons, 2003.• https://knowledge.wharton.upenn.edu/article/what-went-wrong-
at-worldcom/.• American Greed, https://www.cnbc.com/id/100000090.• Inside the WorldCom Scam, 2008,
https://www.cnbc.com/2012/07/31/Inside-the-WorldCom-Scam-Evidence-Files.html.
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• Rita Crundwell was appointed treasurer/comptroller of Dixon in 1983.
• She embezzled ~$53 million from the city from 1990 to 2012.
• She was arrested April 17, 2012• Pleaded guilty on November 14, 2012• Sentenced to 19 years and 7 months in prison on February
14, 2013
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
• Rita Crundwell was appointed treasurer/comptroller of Dixon in 1983.
• She embezzled ~$53 million from the city from 1990 to 2012.
• She was arrested April 17, 2012• Pleaded guilty on November 14, 2012• Sentenced to 19 years and 7 months in prison on February
14, 2013
Dixon’s 2012 budget was ~$17 million
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
How Did She Do It?
• Opened a bank account called Reserve Sewer Capital Development Account (RSCDA) with herself as the only signatory
• Moved City funds into a legitimate City account—Capital Development Account (CDA)
• Created phony invoices that she paid with CDA checks payable to “Treasurer”
• Deposited checks into the RSCDA• Used funds to run her thoroughbred horse farm and
business and on “prize-winning horses, expensive jewelry, luxury cars and even birthday bashes in Venice Beach, Fla.”*
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
Rita’s $2.1 Million Motor Coach
How Did She Get Caught?
• While Rita was away at a horse show, another city
employee stumbled upon the secret account.
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
— Outcomes
Bottom Line:Amount misappropriated by Crundwell: ~$54 millionAttorneys fees: ~$10 millionLoss to Dixon: ~$64 millionRecovery from sale of Crundwell assets: ~$10 millionSettlement with accounting firm: ~$35 millionSettlement with audit firm: ~$1 millionSettlement with bank: ~$4 million Dixon’s net monetary loss: ~$14 million
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
--Where Were the CPAs?
• Dixon employed three CPA firms over the relevant period: a large national firm and two very small firms.
• The large firm asserted that it only did the compilation; the small firms say the large firm did the audits while they just signed the audit reports.
• “Auditors” accepted fabricated invoices as support for Rita’s transfers totaling ~$54 million.
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Source: https://wqad.com/2013/09/26/how-crundwell-did-it-why-auditors-are-also-to-blame/
— Outcomes
Bottom Line:Amount misappropriated by Crundwell: ~$54 millionAttorneys fees: ~$10 millionLoss to Dixon: ~$64 millionRecovery from sale of Crundwell assets: ~$10 millionSettlement with accounting firm: ~$35 millionSettlement with audit firm: ~$1 millionSettlement with bank: ~$4 million Dixon’s net monetary loss: ~$14 million
Source: http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html
The picture can't be displayed.
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Source: 2018 ACFE Report to the Nations.
For More on
• http://www.huffingtonpost.com/2013/02/06/rita-crundwell-sentencing_n_2633791.html.
• https://wqad.com/2013/09/26/how-crundwell-did-it-why-auditors-are-also-to-blame/.
• All the Queen’s Horses, https://www.allthequeenshorsesfilm.com.• All the Queen’s Horses,
https://www.youtube.com/watch?v=05iIbRAiJIU.• Rita Crundwell - Fraud in Dixon Illinois : Small Town Shakedown -
The Fifth Estate, https://www.youtube.com/watch?v=WAYtaFxlw3M.
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Madoff—The Mother of Ponzi Schemes
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Bernard Lawrence “Bernie” Madoff
By Ruby Washington, The New York Times/AP
• The trading side of the business was legitimate; the investment management side was not
• Instead of investing money with client funds, Bernie deposited the funds into an account at Chase Manhattan Bank
• Bernie decided what each client’s “returns” would be and directed back-office workers to generate false trading reports to yield those returns
• The workers entered false trades using historical trading dates that (if the trades had actually been made) would have generated the needed returns—“Reverse Engineered Trades”
• Prosecutors allege that a computer program specially designed for this purpose facilitated the process
Madoff: A Scheme Most Simple
• If clients asked for funds, Bernie simply pulled the funds from his Chase account
• Bernie never promised to double anyone’s money in 90 days• He never made any explicit promises• But, he always—amazingly—generated modest positive returns
(averaging 15%), even when the markets headed in a different direction
Madoff: A Scheme Most Simple
• (A fraud that preys upon members of an identifiable group of people or organizations)
• Some of Bernie’s marks:• Kentucky University• Women’s Zionist Organization of America• Elie Wiesel Foundation• Wunderkinder Foundation (established by Steven Spielberg)• Lappin Foundation• Stony Brook University Foundation• James Harris Simons family foundation• New York Mets owners Fred Wilpon and Saul Katz• North Shore-Long Island Jewish Health System• Julian J. Leavitt Foundation• Fairfield, CT retiree pension fund
Affinity Fraud
Where Were the CPAs?
Operating out of a strip mall on Long Island.Next to a SuperCuts
Where Were the Auditors of Bernie’s $56 Billion Fund?
David Friehling
Where Were the CPAs?
• U.S. says auditor "sold his license" to Madoff• U.S. Attorney's Office in Manhattan says Friehling "not charged
with knowledge of the Madoff Ponzi scheme" but is accused of deceiving investors by falsely certifying he audited Madofffinancial documents and helping "foster the illusion" Madoffwas a legitimate investor.
• SEC says Friehling and his firm "did not perform anything remotely resembling an audit" or try to confirm that stocks Madoff purportedly bought for customers even existed.
March 18, 2009
Authorities say Friehling failed to conduct independent verification of Madoff operation's assets, review sources of its revenue including commissions or examine a bank account through which billions of dollars of client funds flowed.
Friehling's and his family's personal accounts at Madoff firm had an accumulated balance on November 30, 2008 of more than $14 million, and withdrawals from the largest of these accounts totaled over $5.5 million since 2000, the SEC said.
March 18, 2009
SEC says Friehling took steps to hide his investments with Madoff, replacing his own name on his account with his wife's name and later renaming it the "Friehling Investment Fund" to try to conceal his conflict of interest.
Friehling and his firm received $186,000 a year in fees for providing the purported auditing work to Madoff firm along with bookkeeping and tax services for the confessed swindler and various Madoff family members, SEC says.
March 18, 2009
Friehling told the AICPA that his firm did not do any audits—thereby evading any peer review requirements
Where Were the CPAs?
Friehling told the AICPA that his firm did not do any audits—thereby evading any peer review requirementsIt sounds like he was telling the truth
Where Were the CPAs?
114 years.
Where Were the CPAs?
“You only find out who is swimming naked when the tide goes out.”
--Warren Buffett
After 30-40 Years of Success, Why Did Madoff’s Fraud Finally Collapse?
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Source: 2018 ACFE Report to the Nations.
For More on Madoff
• What Bernie Madoff Did and Who He Defrauded, https://www.thebalancesmb.com/bernard-madoff-and-his-ponzi-scheme-393095.
• The Madoff Players: Where Are They Now?https://www.bloomberg.com/news/articles/2018-12-11/the-bernie-madoff-ponzi-scheme-who-s-where-now.
• How Madoff’s Scheme Worked.https://www.businessinsider.com/how-bernie-madoffs-ponzi-scheme-worked-2014-7.
• Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme, SEC/OIG, https://www.sec.gov/news/studies/2009/oig-509.pdf.
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Bottom Line
CPAs are the first line of defense against white collar crime.
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Defining Moments
A defining moment is a point in your life when you're urged to make a pivotal decision, or when you experience something that fundamentally changes you. Not only do these moments define us, but they have a transformative effect on our perceptions and behaviors.
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Source: https://www.forbes.com/sites/forbescoachescouncil/2017/08/03/how-to-define-your-defining-moments/#148b2eb025d0
Are You Ready for Your Defining Moment?
• An important (and lucrative) audit client threatens to fire you if you do not issue a clean opinion.
• Your boss asks you to alter accounting records, just this once.
• You discover that your employer has been manipulating its accounting records.
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Are You Ready for Your Defining Moment?
What Will You Do?
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DON’T Be This Guy
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Source: https://tenor.com/search/sergeant-schultz-i-know-nothing-gifs
BE This Woman
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Source: https://murdershewrote.fandom.com/wiki/Jessica_Fletcher
BE This Guy
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Source: https://www.amazon.com/s?k=peter+falk+columbo&i=dvd&hvadid=1463240711&hvbmt=be&hvdev=c&hvqmt=e&tag=mh0b-
20&ref=pd_sl_1qs7b3y249_e
BE This Guy
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Source: https://www.imdb.com/title/tt2140479/mediaviewer/rm1505240832
635 Slaters Lane | Alexandria, VA 22314
M ain: (703) 836-6701 | Fax: (703) 836-0941
White Collar Crime: What Every CPA Should Know
Dave Cotton, CPA, CFE, CGFM