March 2013 – Attestation Update

Taking ownership

1 Comment / Accounting, Fraud, Pondering / Jim Ulvog

One thing that jumps out from Amy Wilson’s story is that she takes full responsibility for her actions and the consequences.

There is none of that ‘well, you just don’t understand the pressure I was under’, or ‘I had to do it’, or our culture’s favorite ‘it’s mommy and daddy’s fault’.

Instead, what happened is fully her fault.

Consider her comments, which I extracted from the article. I feel free to quote her extensively since I have permission to reprint her article.

Look at the strong statement early in the article: …

Taking ownershipRead More »

Taking ownership Read More »

Try thinking inside the box because the major constraints you work with are not going away

3 Comments / Pondering / Jim Ulvog

“Think outside the box” is the phase used for several decades to encourage creative thinking.

Your outside-the-box thinking won’t make the limits of your staffing, dollar resources, and competitive challenges go away. Won’t do anything to expand the day beyond 24 hours either.

Justin Lathrop suggests we should Stop Thinking Outside the Box.

He pondered this tweet from Bobby Gruenewald at Catalyst Conference: …

Try thinking inside the box because the major constraints you work with are not going awayRead More »

Try thinking inside the box because the major constraints you work with are not going away Read More »

Most common audit deficiencies that generate ethics violation investigations

Leave a Comment / Audits, Peer Review / Jim Ulvog

The AICPA’s Professional Ethics Division has published their report on most common ethics violations in the last year.

About 40% of the cases investigated by the Division deal with audits of government agencies and NPOs. That’s a depressing portion of ethical issues arising from those two areas. I doubt that is reflective of portion of total audits performed.

That statistic should end the perception that audits of government agencies and NPO don’t have risk. If there is a disproportionate possibility you will wind up in front of an AICPA Ethics hearing, you are not dealing with a low risk audit.

Their report provides a good survey of the major issues.

…

Most common audit deficiencies that generate ethics violation investigationsRead More »

Most common audit deficiencies that generate ethics violation investigations Read More »

Fraud Triangle – a case study

1 Comment / Accounting, Fraud / Jim Ulvog

Amy Wilson’s story of her embezzlement and the journey she has taken since then provides insight to the fraud triangle.

That’s the concept which says for a fraud to flourish, three factors need to be present:

Opportunity – the ability to do something wrong. Usually this is accompanied by the ability to hide doing so or get away with it undetected.
Motivation – the need to do something wrong.
Rationalization – the ability to persuade oneself that this isn’t fraud. This isn’t wrong. In fact, taking this money is perfectly okay.

In this situation, her opportunity to commit fraud is quite visible.

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Fraud Triangle – a case studyRead More »

Fraud Triangle – a case study Read More »

Lighten up on the IRS training videos

Leave a Comment / Other stuff / Jim Ulvog

The political class is in horror that videos are used in training events and that it costs money to produce training videos. How frightening! How wasteful!

The furor coming from DC and the media would have you think spending 60 grand for two videos is the crime of the century.

If you’re looking for waste in federal spending, search the Internet for 60 seconds and you will find dozens of examples each of which is thousands of times bigger than this fabricated fiasco.

Time to lighten up folks.

Check these out:

[youtube=https://www.youtube.com/watch?v=VxU6n4pAnrU]

[youtube=http://www.youtube.com/watch?v=CBq8yzLObGg]

(links – https://www.youtube.com/watch?v=VxU6n4pAnrU and http://www.youtube.com/watch?v=CBq8yzLObGg)

Is the Star Trek video roll-your-eyes and groan out loud funny? Yes.

Is it an entertaining spoof of the Star Trek series? Yes.

Cheesy? Yeah.

Campy? You bet.

Are the inside jokes good? Yes. Very good.

At the same time, is it a lighthearted way to open a training session for a few hundred people per event? Yes.

…

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Lighten up on the IRS training videos Read More »

Are balance sheets unauditable? 2

1 Comment / Accounting, Audits / Jim Ulvog

Previous post raised the question whether it is possible that current accounting rules make a modern balance sheet so complex that it is essentially unauditable.

Another item described by Grumpy Old Accountant Anthony Catanach’ column Is FASB Killing the Auditing Profession? is the PwC audit tool of cumulative audit knowledge and experience.

Audit team experience as substantive assurance?

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Are balance sheets unauditable? 2Read More »

Are balance sheets unauditable? 2 Read More »

Tragedy of fraud – another case study – 2

1 Comment / Accounting, Fraud / Jim Ulvog

Previous post started a discussion of the consequences of Amy Wilson’s embezzlement story told here. These two posts are another case study of the tragedy of fraud.

I’ve discussed the consequences of fraud extensively on my blog. Even compiled those posts into a book, available at Amazon.

Let’s wrap up a review of the consequences earned by Mrs. Wilson and the impact on innocent people she loves. Here are more things visible in her article:

I’m guessing this covers sentences a lot of ground: …

Tragedy of fraud – another case study – 2Read More »

Tragedy of fraud – another case study – 2 Read More »

Are balance sheets unauditable?

1 Comment / Accounting, Audits / Jim Ulvog

Is it possible that current accounting rules make a modern balance sheet so complex and judgment filled that it is essentially unauditable?

The answer is a hesitant yes, if I’m correctly reading Grumpy Old Accountant Anthony Catanach’s column Is FASB Killing the Auditing Profession?

He contrasts two parts of the PCAOB reports on inspections of PricewaterhouseCooper (PwC). The PCOAB released two consecutive inspection reports for the firm.

My understanding is the confidential portion gets released if you don’t fix the issues by the next inspection. That means to get two consecutive reports released means the problems identified during inspection one weren’t fixed before inspection two and still had not been resolved during inspection three. Ouch.

Reduce partner time on complex audits

Prof. Catanach combines two issues.

First, the firm’s response says the issues involved are …

Are balance sheets unauditable?Read More »

Are balance sheets unauditable? Read More »

Tragedy of fraud – another case study – 1

2 Comments / Accounting, Fraud / Jim Ulvog

Let’s look at Amy Wilson’s embezzlement story, explained here, as another case study of the tragedy of fraud.

I’ve discussed the consequences of fraud extensively on my blogs. Check out the tags here and here . Even compiled those posts into a book, available at Amazon.

Let’s look at some of the consequences Mrs. Wilson has endured and the impact on innocent people she deeply cares about. Here are some things visible in her article:

She is a convicted felon. I doubt that record will ever go away. Accountants rarely have the political juice to persuade a governor or president to grant a full pardon.

…

Tragedy of fraud – another case study – 1Read More »

Tragedy of fraud – another case study – 1 Read More »

Suggestions from two Fed officials on reducing the dangers of Too-Big-To-Fail banks

Anyone want to make a real movie about the cheaters who made a fake movie to cheat the British tax authorities?

2 questions for those advocating mandatory auditor rotation. My research on the issue

Trust is not an internal control

1 Comment / Accounting, Fraud / Jim Ulvog

It is just a feeling.

That is Amy Wilson’s explanation as she describes her journey through embezzlement into recovery as told in this earlier post. Thanks to Mrs. Wilson for granting me permission to reprint her article.

Her article is very good. It is so well constructed that we can analyze it in detail. I’ll have several posts to draw out my reactions to her article.

Trust is not an internal control

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Trust is not an internal controlRead More »

Trust is not an internal control Read More »

Compilation and Review CPE courses by James Ulvog

Leave a Comment / Compilations & reviews / Jim Ulvog

Looking for on-line CPE courses on compilations and reviews? I’ve written or revised a series of courses for CCH which you can find linked below. I’ve quoted liberally from the CCH site. Here is a list of courses with descriptions to follow:

Course summaries:

…

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Compilation and Review CPE courses by James Ulvog Read More »

One accountant’s journey through fraud, jail, and rebuilding

7 Comments / Accounting, Audits, Fraud / Jim Ulvog

The following article is by Amy Wilson, speaker and staff accountant. It is printed with permission of Mrs. Wilson.

For ease of reading, I won’t put the full article in quotes. Here is her story:

My name is Amy Wilson. I am a wife, a mother, an accountant — and an ex-convict.

Early on as a struggling single mother, I wanted a better life for my children, so I went to night school at the University of Indianapolis and earned my bachelor’s degree. For the next 16 years, I worked hard to achieve a respected position in the corporate world. I started in my teens as a cashier at a car dealership. Next, I worked as a payables clerk for a major hospital in Indianapolis. Finally, degree in hand, I became a staff accountant for a large manufacturing firm. Seven years later, I was hired as an office manager for a small manufacturing business.

For most of my life, I was an overachiever, an attribute that eventually led to my downfall and put me behind bars, a convicted felon.

My slow decline into theft

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One accountant’s journey through fraud, jail, and rebuildingRead More »

One accountant’s journey through fraud, jail, and rebuilding Read More »