On May 24, 2011, news agencies reported cases of fraud rose to an all-time high in the first quarter of the year. So in early June, at IMA's Annual Conference, I attended the education session, "Recent Financial Frauds and How to Avoid Them." Within this session, speakers reviewed various small and large fraudulent business cases along with the accounting controls that should be used to avoid them. All of the control measures presented were a helpful reminder to accounting and financial professionals.
As I returned home from the conference, I wondered how accounting and financial professionals could make such bad choices and what could be done to prevent them. While accounting controls provide safeguards against fraudsters, and treat the symptoms of fraud, they unfortunately do not prevent the scheme itself. To prevent fraud, we need to educate individuals early on about ethics and do a better job of teaching entry level business professionals strong ethical judgment.