Joseph Wells, the founder of the Association of Certified Fraud Examiners, says that accountants are generally not equipped to find fraud. I agree!

Joe says that the main problem is that untrained accounting graduates are trying to fight the fraud was against sophisticated cheats. Sarbanes-Oxley doesn’t do anything to train accountants and auditors about fraud. Few colleges and universities are offering courses on fraud, although that may slowly be changing. The fact of the matter is that accountants are taught about books and numbers, but that doesn’t necessarily translate into the expertise to find fraud.

Joe lists three reasons why auditors can’t possibly find all frauds:
1. Trust - Employers must trust their employees in order to do business. Fraud relies on this element.
2. He says that “fraud is a crime without unique clues”. So while there may be telltale signs that a fraud has occurred, they aren’t as obvious as those for property crimes or violent crimes.
3. Auditors can only audit the information they are given. It is easy to conceal fraudulent transactions.

I agree with Joe. Unfortunately, auditors and accountants are largely ill-equipped to deal with fraud.

A participant’s comment from one of my recent conference keynotes said: “We all know what fraud is….”

Really? I totally disagree, and until accountants can admit that they aren’t educated enough about fraud, the fight against fraud will continue to be an uphill battle.

Read the entire press release here.