Price cut on print books

February 4, 2015, 8:27 am

I’ve dropped the prices for the print copies of my books available at Amazon, Barnes & Noble, and iTunes store.

Here is what you can find on-line:


 Tragedy of Fraud – Insider Trading Edition

Story of Scott London’s fall from regional audit partner at KPMG to prison inmate because of his insider trading.

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Rationalization in action is frightening to see

January 27, 2015, 9:19 am

It is scary to see the power of rationalization. We humans can exert great effort to persuade ourself that wrong is right. With enough effort, we can persuasively argue that wrong is a positive good, the noble alternative.

It is unsettling to me when I see a client deeply believe that tax or accounting fraud is perfectly legitimate and I am the one who is in the wrong to suggest otherwise.  Worrisome is a watching a friend who believes that hurtful or destructive or nasty or evil behavior is Godly. Even more upsetting is when I catch my brain in full rationalization mode.

No, I’m not about to give any examples from clients, friends, or my life.

Unfortunately, we have a sad public example of rationalization racing at full power (sad pun intended).

(Cross-post from my other blog, Attestation Update.)

Some background on Lance Armstrong’s massive doping schemes

Many public sources report that Lance Armstrong has been found to use performance enhancing drugs for a very long time. He won seven consecutive Tour de France races.

According to Wikipedia, in 2012 he received a life-time world ban on all competitive events in all sports. His seven wins were revoked. He was found to have engaged in sophisticated doping schemes for many years.

In 2013, he admitted massive doping in an interview with Oprah Winfrey. He admitted using a long and specific list of banned substances and did so in each of the 7 Tour de France races.

Rationalization on display

Having set the background, let’s look at an article in The Guardian:  Lance Armstrong: I would probably cheat again in similar circumstances. Thanks to Professor Mike Shaub (twitter @mikeshaub) for pointing out the article.

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Tragedy of Fraud series available soon in print

October 2, 2014, 7:46 am

 tragedy-cover   tragedy-cover

In a few days, printed copies of the two books in my Tragedy of Fraud series will be available in print at Amazon.

They are currently available in e-book format at Amazon, Barnes & Noble, and the iTunes store. Read the rest of this entry »

Exercise is boring. So are internal controls. You need to do both.

September 22, 2014, 7:20 am

Exercise is boring.

Sometimes the stretching after a run is painful.

Yet exercise is critical for good health overall.

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1 fact and 2 stories explaining why you should set up a fraud hotline in your charity

July 15, 2014, 9:00 am

What would you think is the most likely way that a fraud is detected?

Internal audit?


External audit?


One fact

Forty-two percent of frauds are discovered by a tip.

Internal audits are the means to catch 14% of frauds. External audits catch a mere 3% of frauds.

Frauds are ten times more likely to be discovered by a tip than by an external audit.

That single fact, 42% of frauds discovered by tips, is a strong argument to set up an anonymous fraud tip hotline.

That data is provided by The Association of Certified Fraud Examiners in their 2014 Report to the Nations on Occupational Fraud and Abuse based on their survey of over 1,400 frauds reported to the organization.

First story

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How do you keep one rogue employee from destroying your company? Or at least prevent a FCPA guilty plea and $108M fine?

April 14, 2014, 8:22 am

I often ponder just how do you create a high-enough quality environment with superb-enough controls that you can make sure one out-of-control person can’t take down your whole organization.

I have four examples.

Most of them (but not all) had really good internal controls, great procedures, told their staff constantly what was acceptable, reminded staff of ethical and legal requirements. Some had rigorous internal monitoring procedures.

Yet one out-of-control person took out a bank, severely damaged another bank, and another individual came close to seriously hurting an international accounting firm. A group of people cost one company a guilty plea under the Foreign Corrupt Practices Act along with a hundred million dollar fine, deferred prosecution agreement, and tons of negative publicity. Let’s take a look at Barings Bank, KPMG, Société Générale, and HP.

Barings Bank trading losses

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Internal control, 1860s edition

April 2, 2013, 8:10 am

Two posts at my other blog illustrate how Wells Fargo stagecoaches used internal controls in the 1860s.

You will see the concepts discussed by your auditor today have been around for over 150 years.

Posts have some fun photos from the Wells Fargo Museum in San Diego. Well, okay, they are fun if you are an accountant or banker or like history of the Old West.