Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Posts Tagged ‘fraud

In case you hadn’t hear, those telephone calls claiming to be from the IRS demanding you immediately pay back taxes are a scam.

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Wouldn't it be nice if the phone id actually was that accurate for every call? Image courtesy of Adobe Stock.

Wouldn’t it be nice if the caller ID was actually that accurate for every call? Image courtesy of Adobe Stock.

(Cross-posted from my other blog, Nonprofit Update, so you may refer your clients to an article that provides depth on how to avoid becoming victim of recent scams.)

The most frequent scam in 2016 was the phone calls saying “This is the IRS and if you don’t pay your past due taxes this instant we will send someone to your house to arrest you right now.”

There are many things wrong with those calls.

As a starter, your first contact with the IRS will never be by phone. You will instead get a letter explaining what the IRS thinks you messed up.

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Written by Jim Ulvog

January 9, 2017, 10:38 am at 10:38 am

Posted in Fraud, Other stuff

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Guess we might want to reallocate blame for that $5 billion trading loss at Societe Generale

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Sometimes it's complicated. Photo courtesy of Adobe Stock.

Sometimes it’s complicated. Photo courtesy of Adobe Stock.

One thing I’ve learned while being in leadership at my church is that a conflict that appears simple to outsiders is usually far more complicated and messy and ugly than it appears, with blame for a conflict sometimes belonging to the party that appears innocent.

I’m slowly catching on that maybe that idea sometimes applies to massive financial fiascos. (Yeah, yeah, I know. I usually catch on really slow.)

Who is at fault?

Back in January 2008 a trader, Jérôme Kerviel, engaged in €50B of unauthorized trades for Société Générale and hid his trades. That’s fifty billion euros. He admits to making fake entries to hide his admittedly unauthorized trades.

Unwinding the trades cost the bank €4.9B.

I recall at the time that the story line was he was a rogue, a scoundrel, etc., doing all this by himself, etc., single handedly pulling off a huge scam, etc, cleverly wending his way between those tight internal controls, etc.

Criminal sentence

Previously, Mr. Kerviel was tried and convicted on criminal charges. His initial sentence was five years, which was reduced to two years (I think it was 2 but maybe was 3).

He served five months in prison, according to the following article.

Wrongful termination

Well, multiple parts of the French judicial system are saying that allocating the blame is a bit more complicated.

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Written by Jim Ulvog

October 4, 2016, 8:00 am at 8:00 am

Posted in Fraud, Other stuff

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Yet another banking fiasco – Opening two million fake accounts to meet sales targets

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Wells Fargo Concord stagecoach. April 2012 photo by James Ulvog.

Wells Fargo Concord stagecoach. Notice the only suspension for running over rough roads is those leather straps under the passenger compartment. Those didn’t smooth out the rocks and bumps very much. April 2012 photo by James Ulvog.

Deep sigh. Another banking fiasco hit the papers yesterday. The Wall Street Journal reported Wells Fargo to Pay $185 Million Fine Over Account Openings.

The bank will pay a mere $185M to settle claims brought by OCC, CFPB (Consumer Finance Protection Bureau, the new creation of the Dodd-Frank legislation), and LA city attorney.

This scheme involved customer-facing employees opening fake bank accounts in the name of existing customers without the customer’s permission. Another variation is opening a fake account in the name of a nonexistent customer. Article says sometimes money would be transferred from a customer’s account into the new, fake account with occasional NSF fees because there wasn’t enough money in the legitimate account to cover legitimate checks.

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Written by Jim Ulvog

September 9, 2016, 8:30 am at 8:30 am

Posted in Accounting, Fraud

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Cheating on your Fitbit? After you stop laughing, think about this from the fraud perspective.

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One option to get superb results on your exercise tracker. Photo courtesy of Adobe Stock.

One option to create superb results on your exercise tracker. Photo courtesy of Adobe Stock.

Sometimes you just have to laugh.

On June 9, The Wall Street Journal asked Want to Cheat Your Fitbit? Try a Puppy or a Power Drill.

Those informal office challenges to get people to exercise often involve using a Fitbit device to track how far participants walk or run.

Apparently a few folks have decided to take some shortcuts.

One fellow attached his tracker to the blade of an electric saw. After leaving it run overnight he had recorded 57,000 steps the next morning.

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Written by Jim Ulvog

June 15, 2016, 8:07 am at 8:07 am

The most interesting information from the Panama Papers is what *isn’t* in the files.

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

The best stories to be told as a result of the massive data leak cannot yet be written.

Why?

The really smart people use multiple layers of shell companies to hide assets.  When laundering money, one should move assets through a series of companies, with each subsequent jump being anonymous.

A long time ago I attended a continuing education class helping CPAs understand fraud. Why are such classes required? So that, hopefully, maybe, CPAs will be able to recognize fraud when it stares them in the face during the course of an audit.

During the class, the instructor went off script and explained to us how to launder money.

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Written by Jim Ulvog

April 22, 2016, 8:13 am at 8:13 am

Posted in Audits, Fraud, Other stuff, Pondering

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More good stuff for auditors – 3/9

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 Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

A few articles for CPAs:

  • Do group audit standards apply when there is only 1 auditor?
  • Pondering on how senior execs “go bad”
  • Link between gambling addiction and fraud
  • Steps by Big 4 to analyze ‘big data’ in audits

2/24 – Charles Hall at CPA-Scribo – Do the Group Audit Standards Apply When Only One Firm Audits Consolidated Financial Statements? – Short answer to the question: yes, they apply. Sorry if that is a shock to you.

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Written by Jim Ulvog

March 9, 2016, 8:43 am at 8:43 am

Posted in Audits, Fraud

Tagged with ,

Journalist returns call to scammer who claimed to be from the IRS. Entertainment and laughter follows.

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Most people hang up on robocalls from charities. If there is a real person, I ask them to go into their spiel and then set the phone down, letting the caller waste a minute or two of their time.

William P. Barrett, writing at New To Seattle, actually takes those calls. He then dissects the charity’s financial statements showing the minimal amount of charity taking place in some organizations.

To the repeat offenders he awards the title of “America’s Stupidest Charities.”

(Cross-posted from my other blog, Nonprofit Update, because the accountants reading this blog will find this story just as funny as I did.)

You probably know scammers have a new scheme of falsely claiming to be from the IRS. Their spiel is you’re just about to be arrested for failing to pay back taxes, the police are on the way to your home, but you can avoid going to jail today by settling up right now by sending money on a prepaid debit card or wire transfer.

Mr. Barrett called back to the number provided in a robocall. The person answering spoke poor English and sounded like he was calling from a boiler room.

He describes the call in his post, Scammers invoking the IRS inundate Seattle.

How did that conversation go? Quite entertainingly.

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Written by Jim Ulvog

December 11, 2015, 9:27 am at 9:27 am

Posted in Other stuff, Social media

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