Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance, 2nd Edition
Now in a Second Edition, this practical book helps corporate executives and managers understand the full ramifications of good corporate governance and compliance. It covers best practices for establishing a unit to protect the financial integrity of a business; theories and models on how and why fraud occurs in an organization; importance of strong internal controls; major compliance and corporate governance initiatives and milestones since 1985; and more. Complete coverage includes implementation guidance for a robust fraud prevention and compliance program, including sample policies, best practice examples, and a 14-point management antifraud program.
- Covers fraud risk assessment and prevention guidance
- Looks at global risk issues, including the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act
- Examines amendments to the Federal Sentencing Guidelines for Organizational Crime
- Discusses Dodd-Frank Whistleblower Provisions
- Explores enterprise risk management key program elements
- Offers coverage of how fraud and compliance failures contributed to the financial crisis
- Includes enhanced principles for fraud data mining
- Presents new cases, checklists and real-world examples, expanded international coverage, and the latest technological tools
- Shows executives and managers what their responsibilities are regarding fraud prevention, internal controls, and compliance
- Provides an instructor's website, including a test bank
- Other titles by Biegelman: Building a World-Class Compliance Program and Foreign Corrupt Practices Act Compliance Guidebook
Completely revised and updated, Executive Roadmap to Fraud Prevention and Internal Control, Second Edition is every manager's best resource for understanding all the complex issues and responsibilities associated with fraud and compliance.
Praise for Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance
"Martin Biegelman and Joel Bartow convert their lifelong experiences and unparalleled knowledge into a concise, well-written book. They provide the essential tools to take aspirational goals for fraud prevention and compliance and build them into concrete and effective programs."
From the Foreword by Bradley J. Bondi, Partner, Caldwater, Wickersham & Taft LLP
"Executive Roadmap touches all the bases on corporate fraud. The authors – both experienced fraud investigators and federal law enforcement agents – lay out the history and major milestones of corporate fraud, and discuss with precision the key issues facing today’s executives and compliance leaders. The book provides a valuable overview for business leaders looking to develop and implement effective compliance programs and instill a culture of integrity in order to help their organizations defeat the challenges posed by today's sophisticated fraudsters."
Jeffrey Eglash, Senior Counsel, Litigation & Legal Policy, GE
"Biegelman and Bartow provide great insight into not just how fraud occurs inside of companies, but why. Preventing fraud requires a solid understanding of both, making this book a must read for any executive who is serious about creating the compliance mechanisms and the corporate culture needed for effective fraud prevention."
Aaron G. Murphy, Partner, Latham & Watkins LLP
"Business leaders would be wise to follow the recommendations in this book. Fraud prevention is more than just creating a set of policies. As the subtitle indicates, it is essential to create a culture of compliance. Empty words accomplish nothing. The authors, both experienced fraud examiners, have spent decades investigating fraud, as well as developing strategies to prevent it. This book is an essential tool in creating an anti-fraud environment in any company."
James D. Ratley, CFE, President & CEO, Association of Certified Fraud Examiners
"Biegelman and Bartow's Executive Roadmap to Fraud Prevention and Internal Control is an essential guide for all who have an interest in eradicating corporate or institutional fraud. Written by experts in detecting and preventing fraud in its myriad forms, this book is a handy source for those who hope to avoid the predicaments that the authors have seen or in managing the crises that arise when the problems cannot be avoided. The new second edition is an indispensable addition to the libraries of internal compliance and legal officers, and forensic accountants."
Joel M. Cohen, Partner, Gibson Dunn & Crutcher, former New York federal prosecutor and liaison to the French Ministry of Justice and OECD
"Biegelman & Bartow's book offers expert guidance to anyone tasked with understanding and tackling fraud in the workplace. Their straightforward approach informs the reader and provides a roadmap and guidance for implementation of an effective fraud mechanism within any organization – small or large. I plan to provide a copy of the book to my Board of Directors and executive members of management."
Lisanne E. S. Cottington, Compliance Officer, Insight Enterprises, Inc.
"This next edition is extremely timely. It covers key topics that any management member needs to know in today’s regulatory climate. These authors have used their extensive corporate and government experience to create a practical and easy to understand compliance guide. A superb resource for any executive."
Karen Popp, Partner at Sidley Austin LLP and former federal prosecutor and Associate Counsel to President Clinton
"With executives increasingly on the hot seat when corporate compliance issues arise, clear guidance regarding risk areas and best practices is invaluable. Executive Roadmap to Fraud Prevention and Internal Control contains a timely combination of illustrative stories and practice tips regarding hazards in this complex area. It is a good resource for both corporate executives and the many professionals assisting corporations to prevent or detect fraud and build a culture of legal compliance."
Barb Dawson, partner with focus on internal investigations and business litigation, Snell & Wilmer LLP
"Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance is a truly phenomenal book. Martin Biegelman and Joel Bartow have accomplished an incredible achievement: they have flawlessly bridged the chasm between the theoretical/academic and practical/tangible. This is a volume that should not be on the bookshelf of every manager interested in compliance and fraud prevention (which should be every manager); it should be dog-eared and open on the desktop of every such manager! Kudos to Messrs. Biegelman and Bartow!"
William J. Kresse, M.S., J.D., CPA, CFF, CFE; Associate Professor, Graham School of Management; Director, Center for the Study of Fraud and Corruption, Saint Xavier University, Chicago
"Biegelman and Bartow have again provided an invaluable resource for leaders in the corporate world who have responsibility for fraud, integrity, and compliance. They send a clear message that addressing fraud is a two part process- establishing robust controls and detection measures; and creating a culture of compliance and integrity. This work provides a detailed tour through the world of fraud controls while keeping the importance of culture at the forefront."
Ronald C. Petersen, Executive Director, Global Security, Ally Financial
"From the perspective of an ethics and compliance practitioner, Martin Biegelman's and Joel Bartow's new offering is a Thanksgiving feast. Too often, companies and organizations get caught up in the moment, and don't stand back to examine the cultural, organizational and historic reasons that fraud exists. Biegelman and Bartow plow that road, and use their insights to offer invaluable tips in the design of effective anti-fraud programs."
James D. Berg, Vice President, Chief Ethics and Compliance Officer, Apollo Group Inc.
"Biegelman and Bartow have indeed produced a functional roadmap for the executive to follow in fraud prevention and internal control. This book is a great asset for those engaged in the seemingly endless struggle to control fraud. A 'must read' for the industry."
Raymond L. Philo, MPA, Executive Director, Economic Crime Institute, Utica College
"As if Executive Roadmap to Fraud Prevention and Internal Control wasn't a powerful enough tool for fraud fighters, now Biegelman and Bartow have added fresh insight and advice to the second edition. With compelling updates on costly internal and external fraud and corruption, together with easy-to-read descriptions of latest fraud-fighting technologies, this is a must-read for fraud examiners, auditors, attorneys and otherswhether they've read the first edition or not."
Peter Goldmann, President, White-Collar Crime 101 LLC/FraudAware
"Fraud borders on the ubiquitous in contemporary corporate culture. This book provides a rich and comprehensive guide to crafting a state of the art fraud deterrence program. While the book is sure to better equip corporate executives and directors in their fight against fraud, I intend to draw heavily upon its content in educating accounting students who represent the CEO's and CFO’s of the future."
Ingrid E. Fisher, PhD, CPA, Associate Professor and Chair of the Department of Accounting and Law, The University at Albany-SUNY
"The book's exploration of fraud theories ranging from 'rotten apple' to the 'potato chip'
(can't eat just one!), provides useful examination of the psychology of corporate fraud that explains its recurring nature and offers clues to creating a fraud resistant culture."
Zachary W. Carter, Partner and head of the Trial Group, Dorsey & Whitney LLP and former United States Attorney for the Eastern District of New York
Foreword to the First Edition xvii
CHAPTER 1 Fraud’s Feeding Frenzy 1
CHAPTER 2 Fraud Theory and Prevention 23
CHAPTER 3 The Path to Greater Corporate Compliance, Accountability, and Ethical Conduct: COSO to Sarbanes-Oxley 47
CHAPTER 4 The Path to Greater Corporate Compliance, Accountability, and Ethical Conduct: SAS 99 to the 2010 Amendments to the Federal Sentencing Guidelines for Organizations 81
CHAPTER 5 Internal Controls and Antifraud Programs 105
CHAPTER 6 Financial Statement Fraud 133
CHAPTER 7 Internal Fraud: Protecting a Company 157
CHAPTER 8 Former Fraudster and New Man 171
CHAPTER 9 External Schemes and Scams: The Rest of the Fraud Story 185
CHAPTER 10 Not Too Big to Fail 205
CHAPTER 11 Designing a Robust Fraud Prevention Program 231
CHAPTER 12 Whistleblowers and Hotlines 255
CHAPTER 13 Time to Do Background Checks 287
CHAPTER 14 Training, Training, and More Training 307
CHAPTER 15 Global Fraud and Corruption Risk 329
CHAPTER 16 The Feds Are Watching: What to Know and Do Now 349
CHAPTER 17 A Fraud Prevention Culture That Works 371
APPENDIX ACFE Fraud Prevention Checklist 391
About the Authors 395
Martin T. Biegelman, CFE, CCEP, has been fighting fraud and corruption for 40 years in various roles in law enforcement, consulting, and the corporate sector. He is currently the Executive Vice President of U.S. Operations for IPSA International, a global risk advisory firm. His extensive experience include conducting internal investigations on behalf of corporate management and boards, FCPA and anti-bribery compliance, litigation consulting, due diligence, and corporate compliance design and implementation. He previously served as the Director of Financial Integrity at Microsoft Corporation. This highly acclaimed fraud prevention and anti-corruption compliance program that he founded and led continues to be a model for other global companies. Mr. Biegelman is a sought-after speaker, prolific author, and the recipient of the prestigious Cressey Award bestowed by the Association of Certified Fraud Examiners for lifetime achievements in the detection and deterrence of fraud.
Joel T. Bartow, CFE, CPP, is Operations Director for IntegriGuard, LLC. Mr. Bartow has over twenty-five years of experience in fraud and security investigations as an FBI Special Agent and in the private sector, where he developed successful fraud prevention programs.
•Covers fraud risk assessment and prevention guidance
•Looks at global risk issues, including the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act
•Examines amendments to the Federal Sentencing Guidelines for Organizational Crime
•Discusses Dodd-Frank Whistleblower Provisions
•Explores enterprise risk management key program elements
•Offers coverage of how fraud and compliance failures contributed to the financial crisis
•Includes enhanced principles for fraud data mining
•Presents new cases, checklists and real-world examples, expanded international coverage, and the latest technological tools
•Shows executives and managers what their responsibilities are regarding fraud prevention, internal controls, and compliance
•Provides an instructor's website, including a test bank