Forensic Accounting

My company can’t afford an antifraud program. Oh, Really?

Two things arrived in my digital devices today that reinforced the fact that your and my businesses cannot afford to not have an effective antifraud program.

In September 2013, I blogged about a Federal grand jury indicting on 10 counts of mail fraud Sandy Jenkins, the former longtime corporate controller for Collin Street Bakery, the  Corsicana, Texas fruitcake company.  He is accused of embezzling “approximately $16,649,786.91” between 2005 and 2013.  See that blog for details.

Yesterday, a Federal grand jury returned a 22-count indictment, known as a superseding indictment, against old Sandy and his wife, Kay, the latter being indicted for the first time.  Among other new charges, they are accused of lying on a loan request to buy a home in Santa Fe when they declared that they earned $25,000 per month.  (Would they have avoided that charge if they had declared that they stole “approximately” $154,164.69 per month?)

Anyway, after discussing the case with my CPA friends in industry and in public practice, I can only reach the conclusion that the fruitcake company was devoid of effective internal controls and antifraud programs.  Stay tuned for Sandy’s trial, which is supposed to begin April 7.

Also, this morning brought to me the article “What’s your fraud IQ?” from the March 2014 edition of Journal of Accountancy.  The article poses 10 questions to assess your knowledge of the appropriate steps for preventing fraud.  It is on the website  Click through the tab for Journal of Accountancy.

Take the test.  Do badly?  Fear for your business enterprise.