The Center for Audit Quality is partnering with Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors to develop fraud-fighting training and tools, including a series of fraud hypotheticals to be used as teaching tools. “We will provide a set of facts and circumstances
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FinCEN: Suspected Terrorist Financing, Money Laundering up in 2010
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said suspicious activity reports (SARs) categorized as Terrorist Financing and BSA/Structuring/Money Laundering rose considerably in 2010 compared with 2009. Terrorist Financing SARs rose 30%; Money Laundering filings, after declining in 2009, increased 9%. The SAR Activity Review—By the Numbers, Issue 16, said
Fraud / Money Laundering
The Financial Crimes Enforcement Network (FinCEN) said that effective March 1 its rules and regulations have been reorganized within a new Chapter X of Title 31 of the Code of Federal Regulations (CFR). FinCEN has not made any substantive changes to the Bank Secrecy Act (BSA) rules. As noted in
U.K. Bribery Act Requires New Precautions for Global Companies
The U.K. Bribery Act 2010 taking effect July 1 represents one of the biggest changes in global anticorruption law since the USA Patriot Act in 2001, but awareness of its provisions remains very low, according to a Deloitte webcast poll. While 78% of respondents who participated in the poll said
FinCEN: Commercial Real Estate Fraud Poses Risks to Economy
The Financial Crimes Enforcement Network (FinCEN) said reported incidences of suspicious activity in commercial real estate (CRE) financing almost tripled between 2007 and 2010. The analysis of suspicious activity reports (SARs) from depository institutions said a key concern in this area is the fact that an estimated $1.4 trillion in
FinCEN: Bankruptcy Fraud, Mortgage Loan Fraud Increasingly Intertwine
Mortgage loan fraud was cited in 54% of suspicious activity reports (SARs) referencing bankruptcy fraud in 2010, up from 42% in 2009, the Financial Crimes Enforcement Network reported Monday. The division of the U.S. Treasury Department also noted growth in reports of real estate “flopping” over the course of 2010,
IRS Issues Final Regs on Disclosing Return Information to Whistleblowers
On Monday, the IRS released final regulations regarding disclosure of return information by the Treasury Department in connection with written contracts among the IRS, whistleblowers and, if applicable, their legal representatives (TD 9516). The new IRS Whistleblower Office may determine during the course of an investigation that it needs the
Handling of Litigation Contingency Disclosure Facing Greater SEC Scrutiny
The SEC appears to be increasing its scrutiny of compliance with financial statement disclosure rules regarding potential court losses. The heightened attention is intersecting with a three-decades-old treaty for lawyers and accountants forged by the AICPA and the American Bar Association. The JofA spoke with attorney Michael Young, chair of Willkie
CPAs Gain Statutory Exemption From Red Flags Rule
Following years of advocacy efforts and a legal battle, CPAs received a permanent exemption from the Federal Trade Commission’s Red Flags Rule with President Barack Obama’s signing of the Red Flag Program Clarification Act of 2010 on Saturday. The Red Flags Rule, which was released Nov. 9, 2007, under the
Court Rules on Question of Wrongdoing Companies Seeking Damages From Auditors
Editor’s note: This is a report from AICPA General Counsel and Secretary Richard I. Miller, Esq. The New York Court of Appeals held recently that the in pari delicto (literally, “in equal fault”) defense is a complete bar to recovery of damages by a wrongdoing corporation against its outside auditors,
Expert Testimony Guidelines for CPA Valuation Analysts
When giving expert testimony, CPA valuation analysts should be prepared to have their reports and testimony withstand the scrutiny of litigation and cross-examination. The following guidelines can help the valuation analyst prepare for potential vulnerabilities that opposing legal counsel may try to exploit. —By Robert Reilly, CPA/ABV/CFF, (rfreilly@willamette.com) a managing
CAQ Outlines Plan to Mitigate Fraud, Announces Partnerships
The Center for Audit Quality (CAQ) on Wednesday published a report that outlines the organization’s long-term agenda to combat financial reporting fraud. The report, Deterring and Detecting Financial Reporting Fraud—A Platform for Action, identifies three areas of focus: a strong, highly ethical tone at the top that permeates the corporate
Fraud
The Financial Crimes Enforcement Network (FinCEN), a unit of the U.S. Treasury Department, reported the first year-to-year decline in suspicious activity reports (SARs) since 1996—a drop from 1.29 million in 2008 to 1.28 million in 2009—but SARs indicating terrorist financing activity increased for the first time since 2004 after several
Survival of the Analytically Fit: The DNA of an Effective Forensic Accountant
If attorneys could engineer the perfect forensic accountant, 78% of them would choose an accountant with strong analytical abilities. In a 2009 survey commissioned by the AICPA, after analytical skills, attorneys chose, in descending order, the abilities to be detail-oriented, ethical, responsive and insightful as the remaining top five essential
Common Question-Evasion Tactics
In her book Extraordinary Circumstances: The Journey of a Corporate Whistleblower, Cynthia Cooper, WorldCom Inc.’s chief audit executive, details the discovery of a fraud that she was able to unravel, in large part, due to her interviewing skills. At a critical point in Cooper’s investigation, Buddy Yates, WorldCom’s general director
Terrorist Financing Reports Rise as Overall SARs Edge Down
The Financial Crimes Enforcement Network (FinCEN), a unit of the U.S. Treasury Department, reported the first year-to-year decline in suspicious activity reports (SARs) since 1996, dropping from 1.29 million in 2008 to 1.28 million in 2009, but SARs indicating terrorist financing activity increased for the first time since 2004 after
Audit Committee Considerations for Whistleblower Hotlines
Audit committees should consider the following questions when assessing the design effectiveness of a hotline: Does the hotline have a dedicated hotline number, fax number, website, e-mail address, and regular mail or post office box address to expedite reports of suspected incidents of misconduct? Does the hotline demonstrate confidentiality,
A Snapshot of Workplace Fraud
The 2010 Report to the Nations on Occupational Fraud and Abuse takes a comprehensive look at workplace schemes, their perpetrators, how the crimes were ultimately detected and their estimated cost. The report, released this month by the Association of Certified Fraud Examiners, is based on data compiled from a study
Keeping Fraud in the Cross Hairs
Five percent of annual revenue—that’s the estimate of how much money the typical organization loses to fraud, according to participants in the 2010 Report to the Nations on Occupational Fraud and Abuse. The report, prepared by the Association of Certified Fraud Examiners, an international organization of more than 50,000 fraud
What’s Your Fraud IQ?
Although the required knowledge, expertise, and roles of auditors and fraud examiners differ, CPAs occasionally find themselves in situations where evidence of fraud is right in front of them. Without a basic understanding of some methods for identifying and analyzing suspicious transactions, unsuspecting accountants might let the red flags of
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