August 2012

Watching and learning from the money laundering cases

Leave a Comment / Audits /

Those of us auditors outside the huge firms may not have to deal directly with the impact of banks engaging in money laundering, yet we can still learn by watching.  Here’s the background in one sentence –  – Many of the largest banks were systematically ignoring U.S. laws against sending money into certain countries.

On my other blog, Nonprofit Update, I have several posts discussing the mess.

Of interest to me as an auditor is the apparently intentional violation of laws and how the corporate tone at the top could have prevented the fiasco.

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Watching and learning from the money laundering casesRead More »

Watching and learning from the money laundering cases Read More »

Fake website used to support claim of unintented steroid use by baseball player

1 Comment / Fraud /

How’s this for a creative scheme? If you are accused of having a banned drug in your bloodstream, create a website that offers an innocent sounding topical cream and then claim that you bought the cream from that site and used it not knowing it contained any bad stuff.

I don’t discuss sports here, but fabricating a website is too good a story to pass up. So here we go…

Giant’s outfielder Melky Cabrera is under a 50 game suspension for using a banned substance.

At the hearing to consider this case, his defense was that he saw a topical cream advertised at a website and bought it. He did not know it had any banned substances in it. That is the reason he tested positive. The unintentional use of a banned substance would be plenty of reason to lift the suspension.

Only one little problem…

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Fake website used to support claim of unintented steroid use by baseball playerRead More »

Fake website used to support claim of unintented steroid use by baseball player Read More »

The new Audit Guide’s here! The new Audit Guide’s here!

Leave a Comment / Accounting, Audits /

(cross-posted from my other blog, Nonprofit Update.)

Well, maybe the release of the draft Not-for-Profit Entities Audit and Accounting Guide isn’t quite as exciting as those ancient commercials announcing the release of the new phone book by showing people running around celebrating that it arrived. (The line was also in the movie The Jerk, starring Steve Martin.) For auditors of NPOs, the arrival of the long-expected audit guide is far better than what the old commercials would have you think about a new phone book.

The draft guide can be found here. The AICPA’s page for the draft is at Overhaul of the Not For Profit Entities Audit and Accounting Guide.

The AICPA’s announcement can be downloaded here. Some highlights, as described in their announcement: …

The new Audit Guide’s here! The new Audit Guide’s here!Read More »

The new Audit Guide’s here! The new Audit Guide’s here! Read More »

See that swirl on the weather map? Looks like a cat 5 hurricane headed for landfall on the big banks

2 Comments / Accounting /

In ‘Blood in the water’, The Economist describes the swelling number of lawsuits against the big banks who are accused of manipulating LIBOR.

From the article:

So far, at least 28 serious lawsuits have been filed. The most recent, for fraud, came from Berkshire Bank, a small lender, on July 25th. It echoes a case filed in May by Wisconsin’s Community Bank & Trust under Wisconsin racketeering statutes against Citigroup, Bank of America, and JPMorgan Chase (the American banks on the LIBOR panel).

That would be 28 suits since the issue exploded about a month ago.

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See that swirl on the weather map? Looks like a cat 5 hurricane headed for landfall on the big banksRead More »

See that swirl on the weather map? Looks like a cat 5 hurricane headed for landfall on the big banks Read More »

2 year prison sentence for corruption case

Leave a Comment / Fraud /

I’ve been following the corruption case in the city next to where I live. Links to earlier discussions are at end of this post.

The mayor was accused of accepting bribes from a local business in return for helping them get back in business. In April 2012, he pled guilty to one count of bribery. The remaining 9 charges were dropped at the sentencing.

Yesterday he was sentenced to two years in federal prison.

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2 year prison sentence for corruption case Read More »

On capital punishment of organizations – Arthur Andersen and Penn State – corporate death versus mild sanctions

4 Comments / Pondering /

Jim Peterson explores the hesitancy our society has to carry out capital punishment on seriously misbehaving organizations.  See his post, Of Crimes and Punishments – And Where Shall Justice Be Found?

He starts by pondering a question from a retired Arthur Andersen partner. The retired CPA wonders if the conviction of a mid-level manager in the Roman Catholic Church who hid abuse by priests will result in the indictment of senior-level executives or the church itself. The painful irony felt by the questioner is that Arthur Andersen was indicted and put out of business because of the bad behavior by one partner and his audit team in following the bad advice of their general counsel.

Essentially, the penalty for Arthur Andersen was capital punishment. Not so for the Catholic Church, Penn State football, or a long string of financial institutions in the news during recent years.

The question is when does our society carry out capital punishment against misbehaving organizations?

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On capital punishment of organizations – Arthur Andersen and Penn State – corporate death versus mild sanctionsRead More »

On capital punishment of organizations – Arthur Andersen and Penn State – corporate death versus mild sanctions Read More »