Title: Build an Antifraud Practice: There's Great Satisfaction in Crime Busting
Abstract: Establishing a solid antifraud practice is not the same as building a typical CPA says Karen J. Tierney, CPA, of Glastonbury, Connecticut, for CPAs the right background, training and expertise, believe the antifraud profession offers great opportunities. Craig L. Greene, CPA, a partner in the accounting firm of McGovern & Greene in Chicago, agrees. You'll find the niche market in fraud examination can involve different and unique approaches, he says. He deals embezzlement cases, corporate internal investigations and fraud by contractors and vendors. This article details the steps these two CPAs used to build and promote a practice in this fast-growing THE MARKET There are many areas where CPAs--especially small practitioners--can specialize. Tierney, who spent nearly a decade investigating bond claims, has made insurance fraud her specialty. While working for an insurance company, discovered that had a passion for investigating fraud in fidelity and surety bonds and decided to pursue this field. Now a sole practitioner, Tierney has nearly 200 cases under her belt. She notes that in the business community today clients are more attuned to fraud than ever before because of high-profile accounting failures such as Enron and WorldCom. With Sarbanes-Oxley an entire cottage industry of experts in corporate governance and compliance has emerged, says Greene. positive aspect coming from the large accounting frauds is that there is an increasing awareness by that they might have problems of their he adds. Certainly, the growth in antifraud services has exploded recently. All of the Big Four firms and most of the second-tier firms now have active and expanding fraud-examination practices. But there is room for smaller practitioners, too. Greene's practice followed a more traditional path. After spending four years a large CPA firm, Greene went on his own, specializing in condominium association audits. During that time he investigated an embezzlement of $1.5 million by the CFO of a condominium management company. I discovered that loved fraud work and made the decision to start seeking out those kinds of assignments, Greene said. (See Antifraud Services: A Partial List, page 49, for some services CPAs can provide.) THE EXPERTISE/EXPERIENCE COMPONENT Obviously, becoming an expert in the field is the first step to building an antifraud practice. Both Greene and Tierney are seasoned veterans and certified fraud examiners, but many CPAs can go through their entire careers without investigating a fraud. So if you lack experience, there are ways to obtain it. Advocate fraud-prevention services. As Greene says, Although investigating fraud can be exciting, preventing fraud from occurring in the first place provides the most professional satisfaction. A thorough audit, although not designed specifically to detect fraud, has been shown to be a significant de terrent. According to the Association of Certified Fraud Examiners' 2002 Report to the Nation on Fraud and Abuse, audits cut the average fraud loss in half (see Occupational Fraud: The Audit As Deterrent, JofA, Apr.02, page 24). But the great majority of small businesses, the highest statistical risk of fraud, are not audited. That fact provides an excellent opportunity for CPAs seeking fraud-detection experience to expand their services to current nonaudit through fraud-education programs as well as internal control and cash account reviews. Education. The cornerstone of fraud prevention is education, and CPAs can offer in-house seminars and other types of training programs to the staffs of their clients. After all, it is difficult to defraud someone who has enough knowledge to recognize the warning signs. Education begins, says Greene, with the client and the employees who work for the organization. …
Publication Year: 2004
Publication Date: 2004-03-01
Language: en
Type: article
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Cited By Count: 1
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