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Financial Fraud Prevention and Detection: Governance and Effective Practices



Financial Fraud Prevention and Detection: Governance and Effective Practices

Michael R. Young

ISBN: 978-1-118-76163-2 September 2013 320 Pages


Step-by-step guidance for board members and executives on preventing and detecting accounting fraud

In the wake of highly publicized allegations of accounting irregularities and fraudulent financial reporting that are shaking up today's corporate community, Financial Fraud Prevention and Detection provides a step-by-step guide to how these crises can envelop a company and how to prevent them from happening in the first place. It is written for almost everyone involved: outside directors, audit committee members, senior executives, CFOs, CPAs, in-house lawyers, and outside law firms.

  • Provides a blueprint for Fraud Prevention and Detection for corporate executives
  • Presents step-by-step guidance to corporate boards and C-suite executives on managing the threat of accounting fraud
  • Prepares directors and executives for the possibility of accounting irregularities
  • Answers the question of how accounting fraud starts—and grows

With solid strategies for prevention of accounting fraud as well as a process to follow when fraud has been discovered, Financial Fraud Prevention and Detection vividly explores the corporate environment that causes fraud, how it spreads, the kind of crises it can create for a company, and the best ways to deal with it.

Preface ix

Acknowledgments xi

Table of Exhibits xiii


Chapter 1: The Origin of Financial Fraud 3

Chapter 2: The Path to Corruption 19


Chapter 3: From Treadway to Sarbanes-Oxley 41

Chapter 4: The Sarbanes-Oxley Act 59

Chapter 5: The Audit Committee 81

Chapter 6: In the Crosshairs: The Chief Executive Of‰ cer 121


Chapter 7: Detection and Its Aftermath 133

Chapter 8: Investigating Financial Fraud: Objectives

and Approach 149

Chapter 9: Finding the False Numbers 161

Chapter 10: Getting a New Audit Report on the

Financial Statements 175

Chapter 11: The Securities and Exchange Commission 203

Chapter 12: Criminal Investigations 223

Chapter 13: Class Action Lawsuits 245


Chapter 14: The Future of Financial Reporting 265

About the Author 279

Index 281