Peer Review

Fraud Prevention Strategies - A Forensic Accountant's Top 20 List

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Overview:: This 1 hour webcast from June 6, 2013 discusses 20 fraud prevention strategies based on the author's personal experience as a certified fraud examiner. The latest ACFE Report to the Nation is referenced where applicable. Excellent examples have been included.
Type of Material:: Workshop and training material/presentation.
Recommended Uses:: In class, homework, lecture. Good reference material for faculty as well.
Technical Requirements:: Media viewer.
Identify Major Learning Goals:: To provide exposure to 20 fraud prevention strategies. A secondary goal is to emphasize that all parties in organizations need to acknowledge fraud risk (not just accountants and auditors.
Target Student Population:: College Upper Division, Graduate School, Professional
Prerequisite Knowledge or Skills:: An interest in fraud topics and some basic knowledge of business operations would be useful.

Rating:
Strengths:: The module is very clear and well presented. The information presented is current, accurate, relevant and based on scholarship. The video nicely integrates the presenter’s understanding, experiences, and personal reactions to the Association of Certified Fraud Examiner (ACFE) Report to the Nation survey. An excellent discussion of strategy #3 (vendor controls) at about 22:00 minutes into the video, is provided which is relevant to the expenditure cycle. Great discussions of some less obvious strategies are included which is imperative to having a good understanding of fraud prevention. Examples include positive pay, the benefits from logging customer complaints, the importance of a fraud risk assessment, and the acceleration in vendor trends. Anotherr excellent discussion involves the underutilization data mining, in particular the use of employee initials and anagrams as indicators of fictitious vendor frauds. Concepts covered greatly enhances content coverage found in textbooks.
Finally, in addition to the webinar, the BKD site has the link to the supporting documents the presenter mentions. Presently the link is http://www.bkd.com/webinars/2013/fraud-prevention-strategies-a-forensic-accountants-top-20-list-hc.htm
Concerns:: None

Rating:
Strengths:: Viewers will gain a significant amount of knowledge about fraud prevention and detection based on real-world experiences in a reasonable amount of time. Learning objectives are included. The presentation reinforces concepts progressively, building on prior concepts, and demonstrating relationships between them.
The presenter’s prioritization of the fraud tips is beneficial; thus it is not just a list, but emphasizes current priorities for a majority of organizations. Confidential hotlines, fraud awareness training, vendor controls, and segregation of duties are just four of the topics discussed. Good insights are provided on the impact of the economic downturn on vendor activities. Recommendations for some industries (manufacturing) have been well integrated. The excellent example with graphics of the print designer perpetrating a fraudulent disbursement scheme includes animations (see just prior to 30 minutes into the video). Excellent examples have also been included thereafter; in particular the discussions of the fake vendor invoice and geocoding are enlightening. The presentation is an excellent educational resource for instructors who might incorporate select portions of the video to emphasize specific topics.
Concerns:: None

Rating:
Strengths:: The presention is professionally designed and delivered. Closed captioned text is available for the hearing impaired. The presentation packs a great deal of information into the hour which is a significant improvement to standard textbook coverage of fraud prevention. The module is easy to use and an excellent resource for AIS and forensic accounting professors.
Concerns:: During the first 8 minutes of the video the visual provided does not change. After this point, the pacing of the slides is fine.
Some minor text errors appear in the closed captioning. At 18:40 into the video, couple of items came across as “both type to bite him”. Other errors exist throughout the video as a result of YouTube controlling the the written translation. As a result, viewers relying on the closed captioning need to be aware of minor phrases that may be misleading or nonsensical and sometimes humorous. Additional examples noticed were: source of the tips became “store”, vendor became “bender” (multiple instances), a lot of companies became “a water company”, widely became “whitely”, and fraud is detected became “broad is detected.” Fraud became the word “broad” several times. Fraud embezzlement became “rodney bedlam”, fraud awareness became “Prada”, unusual items became “I don’t provide them”, area of fraud became “rawhide”, and vendor problem became “bigger problem” multiple times.

Other Issues and Comments:: This presentation could be shown to a variety of audiences, business and not-for-profit professionals, as well as students enrolled in business ethics, introductory accounting, accounting information systems, or audit classes.
The initial clarification between fraud that is immaterial as opposed to what the audit is designed to detect is excellent. Interesting clarification is provided regarding the tradeoff and feasibility for business operations in a completely fraud-proof environment. Other good points included involve the importance of insurance, its necessity and role, including types of coverage applicable to fraud investigations, as embezzlers don’t typically keep the funds; these funds are typically spent when the situation is detected.
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