A CPAs Skills, an Agents Badge
The office belonging to the head of the FBIs Washington field office sports a memento of one of his past jobs: a sign identifying Tom Green as the controller of the Olympic Construction Co. However, Tom Green was the nom de guerre of FBI special agent Thomas J. Pickard, CPA, and Olympic was, in fact, a dummy company set up by the FBI to try to bribe politicians on behalf of Middle Eastern businessmen, in the undercover operation known as ABSCAM. We suspected private investigators would be hired to make sure Olympic Construction was realand not a trap. We had to make it look like a real company. It needed real ledgers and real responses to federal regulatory authorities. CPAs, knowledgeable about how real companies worked, proved able to set up a fake one. As Ive always told agent-trainees, the most important tool they have isnt a 9 mm. handgun; its a number-two pencil.
Pickard has used both tools in his 23 years with the FBI. Licensed as a CPA in New York, with an undergraduate degree in accounting and an MBA in taxation, he worked for two and a half years at Touche Ross before joining the bureau. In the FBIs New York office, he was assistant special agent in charge (ASAC) for all white collar crime investigations and was later ASAC for violent crimes matters. He supervised the trials of the World Trade Center defendants and played a key role in the investigation of the TWA 800 explosion.
Since ABSCAM, the pencil has given way to the laptop computer, now standard issue for all FBI special agents. In February Pickard moved from the Washington field office to FBI headquarters as assistant director in charge of its criminal investigative division, the bureaus third-highest position. The CPAs role in the FBI has grown as well; nearly 1,400 of the bureaus 12,000 special agents are agent accountants. Pickard recently discussed with the Journal frauds that are the concern of all CPAs, important security issues for business and how he has applied traditional CPA skills in new ways.
Accountant as investigator
CPA agents apply their accounting skills in reviewing the finances of top officials: Pickard was one of a small army of special agents who pored over Nelson Rockefellers extensive financial records when he was chosen as vice-president. CPAs look into possible fraud at FDIC banks and work with U.S. Attorneys investigating finances in criminal cases.
Todays financial crimes increasingly involve computers and the Internet, in some surprising places. Illegal gambling houses would keep records on rice paper and throw them into buckets of water to dissolve as we broke down the door. The special agents first task was kicking the buckets over. Now, these outfits use computers and take their bets over the Internet. We raided a drug dealers headquartersthe suspect actually had a group of Pentium computers, which he used for accounts payable and receivable. One terrorist, Ramzi Yousef, encrypted financial records on his hard drive. Special agents eventually decoded the records and were able to use them to win a conviction.
The Internet easily crosses international borders, as do online criminals. An overseas Internet fraud may be the result of a hostile foreign governmentor a 17-year-old with a PC. The FBI maintains units overseas to work with local law enforcement agencies. U.S. companies sell products through a Web site and get excited when orders pour in. Soon, they realize the credit cards used are fraudulent, tied to nonexistent addresses. Ive seen very sophisticated companies cheated this way.
Any CFO at a corporation may have responsibility for keeping payroll data private. So did Pickard, who had an especially urgent reason for redesigning the FBIs payroll system: The bureau had to avoid compromising undercover agents living under assumed names.
Take a tip from the G-men
In many cases, CPA agents work closely with a companys auditors to investigate fraud cases. Pickards experience in fraud and other white-collar crimes has given him insights into what companies should do to protect themselves. Review procedures. For example, check a credit card number you receive online before processing an order. He stressed the need to consider the enemy withinthe disloyal employee. If youre having trouble with your system, is it a malfunctioning server or someone trying to break into a secure area? You used to lock up ledgersare you locking up your systems? Pickards general advice to CPAs is to look at the big picture. Too often CPAs get overly involved in the numbers. Step back and ask yourselfdoes this make any sense?
The electronic world presents a challenge for CPAs, said Pickard. CPAs concerned about their own companies security issues or their clients may want to consider additional education in this area; the FBI does. All agentseven senior onescontinue to take FBI-sponsored classes. Agents can hone their computer skills, for example. Also, the bureau is a CPE provider for its CPA agents, who keep up with new audit techniques. Raids used to end with agents seizing boxes of paper recordsnow its boxes of floppy disks.
A road less traveled
Pickard likes applying his skills to his FBI job but warns it isnt for everyone. There are many prerequisites for being a special agent, and its more physical than a Big 4 job. Your workday can start at 5:00 a.m. FBI policy requires all special agents to be physically able to engage in firearms use, raids and defensive tactics. Pickard once extradited a terrorist from another country, but the criminal was so dangerous no other country would allow any plane carrying him to land, even for refueling. I spent over 20 nonstop hours with my prisoner on a U.S. military transport that had to refuel in midair. But he does emphasize the opportunities for young CPAs (applicants must be between the ages of 23 and 37) interested in something different. The FBI handles more than 200 different kinds of federal violations. The CPA agent is the only special agent with the education to handle all of them. I would not be where I am today without my CPA designation; I would not have had the opportunities.
Richard J. Koreto
AICPA Grants Top Honors to Three
A key innovator, noted leader and an influential corporate board member received recognition in 1997 for their contributions to the Institute and to the profession.
The Gold Medal Award for Distinguished Service to the professionthe AICPAs highest honorwent to Robert K. Elliott, who has served on the AICPA board and governing council, the auditing standards board and the special committee on financial reporting. He is probably best known, however, for chairing the special committee on assurance services. (The recently unveiled CPA WebTrust came out of this committees work, and more new assurance services are on their way.) Elliott also has been active in the American Accounting Association and has served on its executive committee. The co-author of five books, he has written more than 70 articles. Elliott is assistant to the chairman of KPMG Peat Marwick.
Also receiving the Gold Medal was Robert L. Israeloff, head of Israeloff, Trattner & Co. in Valley Stream, New York, and 1994-95 AICPA board chairman. Israeloff has had a distinguished history of committee service, including serving as chairman of both the PCPS and SECPS executive committees and as a member of the special committee on financial reporting. He is a past president of the New York State Society of CPAs.
Kathryn D. Wriston, a lawyer and corporate director, won the 1997 Medal of Honor, which recognizes nonmembers who have made contributions to the profession. She has been a public member of the AICPA board and governing council. Currently, she sits on the board of the American Arbitration Association and is a member of the Financial Accounting Foundation.
O'Reilly Recognized for Audit Career
Vincent M. OReilly received the 1997 John J. McCloy Award for outstanding contributions to the auditing profession. The award was presented by A. A. Sommer, Jr., chairman of the Public Oversight Board of the AICPAs SECPS, at the Institutes National Conference on Current SEC Developments in Washington, D.C.
OReilly is distinguished senior lecturer at the Carroll Graduate School of Management of Boston College. He retired last year from Coopers & Lybrand, in Boston, after 28 years. He had held a number of management positions at the firm: deputy chairman, chief operating officer and chairman of the international accounting and auditing services group. He chaired the ethical practices committee and served on the firms executive committee for 17 years.
A founding member of the Accounting Education Change Commission, OReilly also was a member of the SECPS executive committee and of the Financial Accounting Standards Advisory Council of the Financial Accounting Foundation.
The McCloy award was established by the POB in 1988. Recipients are recognized within the accounting profession for their contributions to the goal of strengthening the integrity and value of auditing within the United States.