In recent years, many accounting frauds have undermined investor confidence in the reliability of financial reports. The sheer number of cases of financial reporting fraud and the inability of certified auditors to uncover fraud is shocking and discouraging. The solution to this threat definitely lies in fraud prevention, which is the subject of this book, dubbed “Guide to Fraud Prevention”.
It is written by Waheed Aremu, who has more than 10 years of experience in anti-fraud activities, much of it gained from legal audit functions and the banking sub-sector. Aremu holds a Bachelor of Science in Accounting from Obafemi Awolowo University, Ile-Ife, Osun State and a Master of Business Administration from the University of Ilorin, Kwara State. He is a member of the Institute of Chartered Accountants of Nigeria (ICAN); Associate of the Association of Certified Fraud Examiners (ACFE), USA and the Chartered Institute of Bankers of Nigeria (CIBN).
This author says that fraud is a threat to modern business activities and economic prosperity. He reports that many large corporations have witnessed financial scandals due to unethical conduct by high-level officials in the organizations. Aremu points out that fraud also has systemic effects on the global economy, so this book has been written to offer fraud prevention strategies. He says that no one is born to be a fraud; rather, people gradually fall for fraud, often unknowingly, due to their ignorance of what fraud entails.
This text has nine chapters as far as structure is concerned. Chapter one is labeled “Introduction to Fraud.” In the words of this author here, “Fraud is a growing phenomenon in all societies today, and the threat of fraud is a reality facing every nation. However, it seems that this threat is not being given adequate attention. The challenges are compounded by the fact that frauds are perpetrated in secret and many frauds can remain undiscovered and, in fact, may never be discovered, although some schools of thought believe that no fraud can remain hidden in the long term. “.
Aremu points out that fraud reports and the way in which they are perpetrated catches people off guard. He says that scammers are ordinary people who simply exploit loopholes within the system. This author adds that it is also interesting to note that experiences with fraud indicate that the perpetrators go through various nuances of human endeavor. Aremu says that this situation highlights the need for organizations to proactively manage fraud risks, create a roadmap for the effective implementation of anti-fraud programs, and establish a remediation policy to minimize the impact. This professional accountant clarifies that fraud slowly erodes jobs and investments and has a negative impact on corporate reputation or brand image.
He educates that there is no universally accepted definition of fraud, adding that fraud is not an abstract concept, however, because it is an idea that exists in real life in such a way that we can identify it when it is exposed.
Chapter two builds on the theme of overcoming fraud challenges. Here, Aremu explains that fraud challenges are not small in any human setting. He says that in modern organizations, fraud challenges manifest in various forms and these challenges must be appreciated in order to overcome them. “An organization faces fraud challenges from other corporate organizations that, in some cases, regulatory and law enforcement agencies may be unable to control,” states this author. He reveals that corporate frauds are also perpetrated by dishonest employees who defy all anti-fraud control measures to commit their financial crimes.
According to him, “Laws and regulations provide controls on fraud and other crimes because they contain sanctions to control the excesses of society. Similarly, organizational policies and procedures have sanctions and rewards. The experience in some cases is that opportunities are created for fraudsters. because they obey the letter and not the spirit of the law or policy as the case may be…”
In chapters three through five, Aremu examines the concepts of understanding fraud prevention; effective framework for fraud prevention and corporate governance.
Chapter six is entitled “Role of key actors”. This author affirms here that the task of ensuring the success of corporate governance is collective and each interested party has a role to play in achieving it. Aremu suggests that the board has the ultimate responsibility for implementing it within the organization. He says: “The external auditor has a responsibility not to be part of a financial statement that does not reflect a true and fair view of the underlying accounting records…”.
In chapters seven to nine, this author analytically x-rays the concepts of ethics; compliance; and ethics and compliance program.
The use of animal symbolism to illustrate the fraud risk quadrant and categories is part of the stylistic creativity of this book. A low impact, low frequency quadrant is identified as rabbits. The second high-impact, low-probability quadrant is represented by bears. The third low impact but high probability quadrant is dogs, while high impact and high probability is represented by snakes.
The title of the text is short but assertive. Aremu makes abundant use of graphics to visually expand the scope of the readers’ comprehension. The cover design is graphically simple but non-verbal communicative. The language is simple while the ideas are clearly presented.
Note an error on the outside back cover as follows: “…has over a decade of experience in enforcement and anti-fraud activities, much of which has been acquired…” instead of “…has over a decade of experience in control and anti-fraud activities, much of which was acquired…” This and other minor ones should be corrected in the next edition.
This text is a conceptual masterpiece. It is a compendium of effective solutions to the multiplicity of frauds that permeate our current society, especially the corporate world. This book is highly recommended for auditors, corporate organizations, and managers of national economies. It’s fantastic.
