Where networking and knowledge intersect.
Tommie W. Singleton and Aaron J. Singleton | Reviewed by Horst Karin, Ph.D., CISA, CISP, ITIL
The authors begin the fourth edition of Fraud Auditing and Forensic Accounting with the words “When times are good, people steal. When times are bad, people steal more!” These words express in simple terms the fact that the risk of fraud is continuous and, consequently, the battle against fraud will always need better methods for detection, examination and prevention. The mission of this book is to do just that: to provide a comprehensive textbook filled with knowledge, experience and methodologies for the financial auditor, fraud auditor and forensic accountant.
As fraud is not limited to single areas, the authors approach the topic by providing the background and understanding of fraud, its evolution, its cycle, its signs, the psychological profile of a fraudster, the fraud audit, fraud responses, and controls to prevent fraud. Areas with a high risk of fraud in the computer and cyberdomain or in financial accounting systems receive extra attention in this book.
The chapters about the history of fraud, starting with the first major corporate fraud in 1717 (The South Sea Company) up to the mortgage fraud losses in 2007, are compelling because the reader can recognize patterns and typical signs of fraud. The recent history of major fraud cases and their financial impact on the economy shows the increased importance of the audit and antifraud profession.
The advantage of both authors is that they can draw from their extensive practical experience in fraud auditing and from their years of auditing of information systems, financial statements and regulatory compliance. Also, their experience from presenting the content in seminars and training sessions has allowed them to improve this fourth edition in a way that is valuable for both the student and the audit practitioner. It teaches the necessary background, basics, approach to risk assessment and audit specifics to empower readers to develop their own strategies and methodologies for fraud audits and for establishing appropriate controls.
The book delivers a conceptual approach to fraud prevention. It shows that fraud detection is tied to prevention and that both must be part of an effective antifraud control system.
The book’s content is structured in 17 chapters and is supported by appropriate graphics, tables, summaries and references to secondary resources. Chapter titles include:
The strength of the book is the combination of theoretical aspects of fraud, real-life case examples, fraud prevention concepts and legal considerations from the perspective of accountants. It is written for accountants, auditors and students of the profession.
Corporate policies and governance play an important role in fraud prevention. For that reason, the book is also a valuable read for information security specialists, internal auditors, policy makers, business process owners, management and, last but not least, those who are studying for the Certified Information Systems Auditor® (CISA®) exam.
Fraud Auditing and Forensic Accounting, 4th Edition is available from the ISACA Bookstore. For information, see the ISACA Bookstore Supplement in this Journal, visit www.isaca.org/bookstore, e-mail firstname.lastname@example.org or telephone +1.847.660.5650.
Reviewed by Horst Karin, Ph.D., CISA, CISP, ITILpresident of DELTA Information Security Consulting Inc. Karin provides consulting services in information security and risk management; SAP security/governance, risk and compliance (GRC); public key infrastructure (PKI); and WebTrust, and has provided advisory services in regulatory/sustainable compliance since 1998. His most recent publication is a standard book for security and risk management in SAP systems (German and English versions, 2010), which he coauthored with Mario Linkies.
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