The ex-CFO of Enron, oh humbly, asks:
"If the internal and external auditors and lawyers sign off on it, does that make it okay?"
History has shown us that, "that all depends." However, maybe things have changed?
[via HBR]
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And Here We Thought All Accountant Bloggers Were Doing It for the Forces of Good
The gamut of accounting bloggers that we’re acquainted with are good people despite their individual proclivities. Things like paranoid fantasies that involve every level of government bureaucracy (we’re looking straight at you, JDA) and perverse obsessions with stilettos that even freak us out (ahem, Francine) don’t make anyone a bad person, just well, weird.
That being said, it was only a matter of time before an accountant/blogger actually turned out to be criminal*.
Russ Fox at Taxable Talk:
About a year ago I discover a tax blog called Apirl15.com. I doubt we’ll be seeing any more of this blog; according to an affidavit from an IRS Special Agent, the proprietor of the blog has admitted to embezzling $8.5 million.
William Murray, a CPA from Sacramento, allegedly told his clients to pay their taxes through a “trust account” system. This “service” would help the clients and make things easier for them. Mr. Murray also allegedly had clients send money that he would allegedly “loan” to other clients.
William “No, not Bill” Murray used the client money for the run-of-the-mill stuff: cars, houses, entertainment (i.e. hookers, llelo), plus it’s alleged that he’s a degenerate gambler. A model citizen really.
Despite this blow to the accounting blogosphere image, you can sleep well knowing that if we ever ask for your money it will be used for the purposes of providing you with the finest accounting rag news publication possible. There are reputations at stake.
April 15th No More [Taxable Talk via Tax Update Blog]
*You were a criminal before you started blogging, Sam.
Sam Antar Wants You to Think Like a Crook
In early December, the JDA gave us a little taste of how the mind of a crook works when she interviewed Sam Antar, the former CFO of Crazy Eddie’s.
We caught up with Sam again recently and in case you had decided that he had redeemed himself by speaking to universities, government agencies, and businesses telling those people how to detect fraud, Sam would take issue with that.
“I’m the same crook that I was when I was the CFO of Crazy Eddie’s. I haven’t changed. I got caught,” Sam told us. Sam doesn’t believe in redemption but he will tell you that he’s reformed, “A criminal is like an addict. You’re either in recovery or you’re not.”
In addition to his feelings on his past criminal behavior, Sam has strong opinions about the audit profession and how the current accounting curriculum does not adequately prepare young auditors for the masterminds they’re up against. “To catch a criminal, you’ve got to think like a criminal.”
Sam would never suggest that you all take a turn at white collar crime in order to become better auditors. That would disappoint your parents.
So what are his ideas? Here’s a few things to get you started:
• Sam believes that the current curriculum should be expanded to include criminology, criminal psychology, forensic accounting, and courses that focus on internal controls.
• With this expanded curriculum, an advanced degree program should be implemented for those students that wish to become CPAs.
• In addition, Sam believes that the CPA exam should be expanded to include a section dedicated to fraud.
We did some looking around and found that two schools: Carlow University in Pittsburgh and Franklin University in Columbus, OH both offer undergraduate degrees in Forensic Accounting and that two more: St. Thomas University in Florida and University of Charleston in South Carolina offer graduate degrees.
As long as white collar fraud remains front page news, there will be people asking “where were the auditors?” Right or wrong, that is the reality of the situation. You can fight it tooth and nail but ultimately the market will demand more forensic audits for high risk clients. Even if the odds of you finding a single fraudulent transaction in your entire career is nil, shouldn’t you be prepared for that chance?
Sam thinks so. And he convinced (or maybe just conned?) us. You still got it, Sam.
Photo by Buck Ennis for Crain’s New York and Investment News.
Ernst & Young Employee Shared Sue Sachdeva’s Taste in Loot, Lacked Her Fraudulent Self-control
If you work for a partner who likes shamelessly showing off their money, it’s likely that you will think to yourself one of two things: 1) “What a flashy douchebag.” OR 2) “How do I get to be that flashy douchebag?”
For Lily Aspillera, her thinking was more along the lines of the latter, as she made off with $1.7 million from 2002 to 2008 by writing checks to herself that drew on an account of an E&Y client. She used the cash to buy your run-of-the-mill embezzler items: German cars, jewels, vacations, a nice home, etc.
An executive assistant at the giant accounting firm Ernst & Young has been sentenced to more than two years in federal prison for a $1.7 million embezzlement scheme that helped finance a posh San Francisco home, two BMWs, jewelry and stays at luxury resorts, authorities said Wednesday.
Lily Aspillera, 65, of San Francisco was ordered Tuesday by U.S. District Judge Susan Illston to serve 30 months behind bars for mail fraud and tax evasion.
Impressive. Not necessarily by Sue Sachdeva’s standards but impressive nonetheless. However, Lil’s little scam only last a measly 6 years compared to Sachdeva’s twelve year scam because yes, her own greed got the best of her:
“Like so many who commit fraud, over time she increased the amount of money she embezzled, apparently emboldened by not getting caught,” Assistant U.S. Attorney Doug Sprague wrote in a sentencing memorandum.
Defense attorney Donald Bergerson wrote in court papers that his client “has been punished by her own conscience as much as she can be punished by any term of imprisonment.”
The personal guilt over getting caught – after managing to steal money for only six years – would be pretty overwhelming.