The Successful Frauditor’s Casebook

by Mark Rowe

Author: Peter Tickner

ISBN No: 978-1-119-96059-1

Review date: 28/03/2024

No of pages: 308

Publisher: Wiley

Publisher URL:
https://www.wiley.com/en-gb/The+Successful+Frauditor%27s+Casebook-p-9781119960591

Year of publication: 20/05/2012

Brief:

price

£42.50

You’ll have a hard job finding a book on fraud prevention as detailed and rich in insight as this one by the former director of internal audit at the Metropolitan Police. Peter Tickner notes wryly at the very start that he could have called this book ‘The successful fraudster’s casebook’, as many of the criminals got away with it for years, and one ‘has continued to live off the fruits of his corruption’.

If there is a theme to this book, it’s that while crime doesn’t necessarily pay, nor are the good guys bound to triumph. In fact, that attitude is downright dangerous, if you assume that just because you are morally and professionally good, everyone else around you is also. Many of the cases Peter covers – some he has experience of as an auditor, some from making the news – are from the National Health Service, schools and charities (and charitable schools), police and government; all places where the ideal is public service, of doing good.

Why would someone steal from a charity, a school, the police? In a word, the common denominator as Peter says in the preface is greed; which drives the fraudsters to lie and cheat, own something that isn’t theirs. They may be borderline fantasists: “The one practical skill that all these fraudsters possess is a remarkable talent for creative accounting and creative story-telling.”

Like his first book, this is something of an autobiography, Peter telling (not quite) all about cases inside the police; and indeed the chapter ‘corporate credit cards for cops’ gives an update on a case that Peter described in his first book, How To Be A Successful Frauditor. But the book is far more than a memoir; in fact, if you are interested in business, the police, and crime – and who isn’t – since the 1980s, you can be gripped by each chapter. For Peter does more than spell out cases; he gives insight and judgement into watching out for fraud and wrong-doing – not the same things. If a company trying to win a contract has glossy brochures but is evidently not equipped for the job, alarm bells should ring for purely business reasons. Although it is not illegal, as Peter says, ‘it is always a worrying sign when you find that a member of a team involved in dealing with a contractor has turned up working for the contractor’. In other words, things that aren’t against regulations can still cause a sharp intake of breath.

Here, then, is a theme. Red flags, warning signs, whatever you want to call them; people with flash cars and clothes that they simply cannot afford on their wages alone. Peter covers the Barings Bank and Nick Leeson ‘rogue trader’ case, and Joyti De Laurey, the convicted fraudster from Goldman Sachs. After going through the case, Peter notes that she now claims to be a reformed character; indeed, Professional Security recalls hearing her give her story in those terms to one of the University of Portsmouth annual fraud conferences, arguing that everyone at Goldman Sachs was making so much money that they did not notice what she did; thereby rationalising that she was no different from the financial institution (an interesting slant on the trendy criminological idea that big business is ‘crimo-genic’). To all that, Peter comments that her message is persuasive, ‘from a persuasive woman to those that want to hear it’. Peter here as always is a sceptic: “The denial and re-writing of history to those around, with the attempt to claim a higher motive than straightforward greed simply doesn’t ring true in my experience.”

As that may show, Peter goes deeper than most books about fraud, or indeed any subject, in his refusal to take documents or words at face value. He describes the negotiations he’s been through; how managers may think, and even say aloud, that the safest thing to do is to ‘bury’ a case rather than have the ructions of bad publicity (that will harm careers). He’s candid about how work can get tricky for an internal auditor or investigator, ‘when their own top management are driven by dogma ora grand strategic plan that they’ve sold to the rest of the organisation’. Leaders feel tied into the dogma and stick by its flaws, even if a fraud becomes so large as to threaten the entire organisation, whether financially or reputationally.

Outsourcing in itself is not necessarily bad, but it can be the villain if it’s not done carefully. As Peter writes, facilities management ‘have been rich pickings for fraudsters attacking the public services’, because criminals worm their way into a police force, the NHS or local government; to carry out the frauds, they corrupt people, whether to win contracts or glean commercial intelligence. But as Peter says somewhere, proving corruption is ten times harder than proving fraud.

Internal audit, like business, is sometimes about the lesser of two evils. It’s about being alive to weaknesses in human nature even in normally or outwardly good people. Did you know for example that you can easily check if paper documents have been added to a file? The ‘trick is to use a small, hand-held ultra-violet light to scan each page. If something has been inserted later, it will glow differently from the pages that have naturally faded together in the file.”

Simply to know that, let alone act on it, can separate you from people in a workplace who just want to work a nine to five; and Peter does set out, as in his other books, how he got obstructed at times in his job of auditing.

Peter closes by asking in a short chapter, ‘can significant frauds be nipped in the bud’? He is not a one-dimensional catch-fraud-at-all-costs man; he appreciates that putting too many checks in would only make doing business too difficult. But you have to give yourself the best possible chance to nip a first time fraud in the bud (and it’s not enough to put in measures, if a fraudster can talk his way around them). He stresses the need for a culture of anti-fraud, and that problems get filtered to the right people at the top; and anyone raising concerns has to feel encouraged. All too often, the ones raising the alarm get punished – including those in audit. Peter also raises something relatively little considered or aired by security people; the vetting of new employees and those in a position of trust (‘there is no real excuse for not checking the financial soundness of future employees’, Peter writes, which could have caused Goldman Sachs to think twice about Joyti De Laurey).

Peter Tickner Associates website: http://petertickner.co.uk/.

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