Forensic Accounting and Fraud Investigation for Non-Experts, Second Edition
Wells, Joseph T., The CPA Journal
Forensic Accounting and Fraud Investigation for Non-Experts, Second Edition By Howard Silverstone and Michael Sheetz Published by Wiley; 2006; ISBN: 0-471-78487, 294 pages (hardcover); $50
Reviewed by Joseph T. Wells
Like most people, I do not enjoy every book I've read. Because I was so turned off by the title, I agreed to review Forensic Accounting and Fraud Investigation for Non-Experts, second Edition, with some trepidation.
I hold the strong opinion that nonexperts should not be engaged in forensic accounting and fraud investigation, because these are highly specialized occupations. It would be similar to this author penning Brain Surgery for Amateurs; some skills can be acquired only through education and extensive practical experience. Unlike the worst outcome of performing a lobotomy after reading about the procedure, flubbing a fraud investigation is usually not fatal. But it can be extremely expensive and painful if conducted by a rookie; just ask a defendant from a botched case of the past.
For a book to teach a novice this craft is too much to ask, however. Antifraud education for accountants should begin in college, where qualified teachers in a formal setting can provide proper guidance through myriad case studies and practical exercises. If a little knowledge is a dangerous thing, this well-intended work could be hazardous in the wrong hands. For example, a scant 25 pages is devoted to conducting interviews, the stock-in-trade of investigators. Omitted entirely are such basics as Miranda warnings. (Law-enforcement officers must advise subjects under arrest or in custody of their constitutional rights.)
Equally disturbing is a glaring error or two. The book quotes the 1996 and 2004 Association of Certified Fraud Examiners' Report to the Nation on Occupational Fraud and Abuse. I have detailed knowledge of these studies because I was the principal researcher for both of them. According to the authors, the ACFE estimated the cost of occupational fraud in 19% as $400 million, a figure off by orders of magnitude. The actual estimates were $400 billion for 1996 and $660 billion in 2004. Another issue involves the suggested readings. Because this is the second edition, far too many references are from the late 1990s, when the first edition was published. …