Book Review: Executive Roadmap to Fraud Prevention
Executive Roadmap to Fraud Prevention and Internal Control
by Martin T. Biegleman and Joel T. Bartow
Although it seems like one could as the authors say “just tell people not to commit fraud,” that approach doesn’t always work. The authors discuss how to prevent fraud by using:
- Internal controls,
- Information security,
- Whistle blowers,
- Background checks and
Fortunately only the first 20 pages are spent recounting the well-known frauds at World Com, Enron, Tyco and others. The rest of the book covers specific strategies to prevent mostly financial statement fraud, with lots of case studies and interviews with fraud investigators and convicted fraudsters.
The book is easy to read, with numerous subheads and has an executive summary for each chapter.
Why is this important
Fraud can cost a company money and affect morale. It can also result in criminal prosecution. By understanding the reasons someone might commit fraud, as well as the methods they might use, you can increase your chances of spotting fraud.
When this subject is applicable
The authors briefly discuss Sarbanes-Oxley public company requirements and most fraud examples are large public companies. Much of the text details fraud prevention strategies applicable to any size company and as discussed in a Certified Fraud Examiners report, “92% of all frauds perpetrated against companies are asset misappropriation.” The chapter on internal fraud covers cash misappropriation and corruption schemes involving bribery, kickbacks and bid-rigging, which are frauds that can occur at any sized company.
How to apply this
This text provides an overview of fraud rather than specific checklists or fraud prevention plans. The appendix does include two useful fraud risk factors related to
- Misstatements arising from fraudulent financial reporting and
- Misstatements arising from misappropriation of assets
Who this book is for
- An executive, manager level, CEO or CFO seeking an overview of fraud
- CPAs just starting their career needing an overview
- Accountants looking for a new perspective on fraud prevention
- Someone considering becoming a CFE (Certified Fraud Examiner) or a CPP (Certified Protection Professional)
This text is an overview of fraud written in an easy-to-read format that is more interesting and entertaining than most accounting books. While this text does not have specific fraud audit program steps or checklists, it provides an insightful look at the how and why of financial fraud.
This book is recommended as a reference book to read and then keep on hand for reference.