White Collar Crime and Detecting Fraud Schemes

By Freed Maxick on August, 15 2012
Back to main Blog
Freed Maxick

Freed Maxick provides accounting, auditing, tax and consulting services and serves public and private companies, not-for-profits and municipalities to enhance profitability, save taxes, improve accountability and preserve wealth.

A Closer Look at the Motives and Methods of the Criminal Mind

In a recent August article from The Journal of Accountancy, author Jeff Drew takes a unique look at what forensic accounting professionals can learn from the criminal mind and the crimes they commit.

From Drew’s article, “The AICPA Fraud Task Force, a group sponsored and supervised by the Institute’s Forensic and Litigation Services (FLS) Committee, provides fraud detection, investigation, and prevention information to AICPA members. As part of this mission, the task force located and interviewed half-dozen perpetrators of significant accounting fraud. The task force summarizes the interview responses in a new report designed to help CPAs implement controls or other measures to prevent similar fraud.

The six individuals who agreed to talk to the task force did so with the understanding that their names would not be revealed. The information they provided paints a broad picture of who they were at the time each fraud took place—and how they have changed since then.”

business interruptionThe interview responses provide a more thoughtful look at several schemes in detail including the Ponzi scheme, misappropriating funds, mismanagement of collections, loan fraud, stock inflation and bogus revenue reporting. These interviews and the breakdown report of each scheme provide insights into the criminal mindset and ideas and research for CPAs to structure better internal controls and craft more insightful questions about financial statements.

To read the article in greater detail, check it out here.

More Insights and Guidance on Risk Management Issues - Click here.

Stay up to date