Sam Antar, former chief financial officer of the now-defunct electronics chain Crazy Eddie's, orchestrated a monstrous accounting fraud in the late 1980s and went on to serve as the government's key witness in the criminal and civil prosecutions of the case.
He pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit mail fraud and obstruction of justice. As part of the deal, he was sentenced to six months house arrest, 1,200 hours of community service, three years of probation and approximately $10,000 in fines and fees.
Now Antar is trying to tell auditors we're they're going wrong and why they're not picking up accounting fraud.
He explains more at his White Collar Fraud site. And the actual mistakes auditors are right here.
Mistakes include assuming the answers to good questions to be correct, assuming a proper audit can be conducted in the absence of credible internal controls, under educated, under skilled, and under experienced audit staff, lack of investigative skills, lack of professional skepticism, allowing company staff to distract auditors from doing filed work by engaging in social conversations thereby wasting time during audits, failure to observe inventories in all locations and failure to observe inventories simultaneously in all locations.
And that's just a few.
What's really needed, Antar says, is to fix up accounting education. Tomorrow's beancounters need to be taught about how to detect white collar crime.
He explains why in this Q&A here.
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