The ACFE seminar “Using Data Analytics to Detect Fraud” on Feb. 5-6 at the SF Omni hotel was a successful event. Jeremy Clopton, presented masterfully a mixed overview and detail on how to utilize data analytics in fraud into two packed days of teaching. Over sixty CFE’s from around the country attended the event. Special thanks to our Chapter volunteers Svetlana, Nadia and Melanie for their great support.
Thanks to everyone who helped make yesterday’s SF ACFE Chapter meeting a great success. With well over 50+ attendees we started off the year with passion and boldness like never before. A special thanks to our guest speaker Maureen Downey, DWS, CWE from Chai Consulting who did a great job packing a day long training into an hour presentation on the impact of global wine fraud and counterfeiting. Thanks also to sponsors and host Golden Gate University and Chipotle.
Years ago when I started my career in fraud investigation I was quite pleased with the quality of fraud resources available to anti-fraud professionals. As a cornerstone to help fraud professionals understand the how, why or when fraud occurs, the Fraud Triangle was developed by Dr. Donald Cressey. This has been a great tool to understand why generally good persons – cross the line – to do bad things. However, over the past few years I have seen a drastic change in the fraud landscape as it pertains to the rise in Cyber-Fraud. Now seems to be the right time to question whether the Fraud Triangle is still the best tool to properly address this shift in fraud.
Historically anti-fraud professionals have looked at fraud from the perspective that most cases of fraud were being done by organization “insiders”. Typically this fit well into the ACFE Fraud Tree major categories of; Asset Misappropriation, Financial Statement Fraud and Bribery & Corruption, where embezzlement, inflated revenues or kick-backs were occurring. We relied on the Fraud Triangle to explain the pressures, rationalization and opportunity that motivated and allowed the fraudster to perpetrate the act. In most instances the Fraud Triangle fits like a glove and is a very useful tool. It is flexible enough to fit into almost any type of organization at any level. It helps us to understand the emotional and psychological motives of fraudsters to identify not only gaps in a control framework, but also guides us to consider other aspects of the organization, such as its ethical culture.
However, with the dramatic rise of Cyber-Fraud over the past 18-24 months, organizations are finding themselves under attack not only from “insiders” but more and more likely from external fraudsters. Fraudsters who do not fit into the classic fraud triangle, due to the fact that they are not “trusted employees” or other traditional insiders who have veered into an ethical dilemma. From what we know, Cyber-Fraudsters can be located anywhere in the world that has an internet connection. They do not share the same language, culture or even legal systems that we do. For some it is simply a job. They are young and free and sometimes are just having fun. It is more about risk and reward than rationalization. Of course, there are also organized crime syndicates involved, or even a foreign government or two. However, none of these variations represent the traditional fraudster as described by the fraud triangle. What our profession now needs is to adapt to the changing fraud landscape. Who’s up for the challenge ?
It was great to see so many of you at the ACFE Global Conference. There were over 50 attendees representing the SF Bay Area. Here is a photo of me with Nadia Brannon of EY at Tuesday’s networking reception.
SF Chapter President
As some of you may already know, the SEC is hiring in SF. Find details below:
Association of Certified Fraud Examiners
San Francisco Chapter
The Association is a multi-faceted organization consisting of Investigators, Law Enforcement, Certified Public Accountants, Auditors, Loss Prevention Personnel, Attorneys and related Security Professionals
It is dedicated to fighting fraud and white collar crime by presenting programs and seminars designed to assist in the detection and prevention of fraud.
In addition, the San Francisco Chapter, with its diverse professional membership, provides an excellent environment for networking opportunities.
You do not need to be a member of either the Chapter or the ACFE to attend Chapter meetings.
Be sure to check our Web Site often to keep informed about what’s going on at SFACFE.
For more info please contact: Steve Morang at firstname.lastname@example.org