Building a Fraud Practice for Tomorrow

Jeffrey N. Aucoin, CFE, CPA, CFF, CIA

Senior Manager

June 13, 2011

Introduction

• Fraud is…everywhere.

• We must respond by…

• Planning for the future.

• Setting goals.

• Working hard.

Objectives

• Goals for any fraud practice

• Assessing your fraud practice

• Areas of focus

• Conclusion

Goals

• Quality (People and Resources)

• Growth (Clients and Referrals)

• Profitability

Assessment Process

Simple three step process:

1. Assess where your practice is today.

2. Assess where you want your practice to be at some

point in the future.

3. Develop the “road map” to get to the future.

Defining the Areas of Focus

• Internal

• People

• Resources

• External

• Clients

• Referral Sources

• Profitability

Step 1: Today

• Internal

• People

• Resources

• External

• Clients

• Referral Sources

• Profitability

Step 2: Tomorrow

• Internal

• People

• Resources

• External

• Clients

• Referral Sources

• Profitability

Step 3: Path

• Internal

• People

• Resources

• External

• Clients

• Referral Sources

• Profitability

Internal: People

Internal: People

• Recruiting

• Training

• Staff Development

Recruiting

• How many people do you need at each level and what

experience and skills should they have?

• Where will these individuals come from?

• Promotion within your department

• Transfer from another department within your

company

• Hire a graduate from a local university

• Seek an experienced candidate

Recruiting (continued)

• Experience

• Skills

• Self management

• Problem solving

• Critical thinking

• Researching

• Writing

• Etc.

Training: Internal

• Presenters

• Internal leaders

• Staff members

• External professionals

• Possible Formats

• Monthly or quarterly lunch topics

• Annual strategic planning meetings

• Staff-level training programs

Training: External

• Professional organizations

• Annual conferences

• Webinars

• Specific training courses

• Other options may include

• Testimony boot camp

• Team building exercises

• Presentation skill

• Writing skills

Staff Development

• Strategic planning meeting/retreat

• Mentoring/coaching programs

• Evaluations

• Annual goal setting

• Annual evaluations

• Engagement evaluations

Internal: Resources

Internal: Resources

• Processes

• Templates

• Technology

Processes

• Conflict checks

• Client and engagement acceptance

• Staff and project scheduling

• Document management

• Interviewing individuals

• Work-product quality

Templates

• Engagement letter

• Project budget

• Document request

• Deposition questions

• Work program

• Report and schedules

Technology

• Data analysis software:

• ACL: www.acl.com

• IDEA: www.auditsoft.com.au

• MS Excel and Access www.office.microsoft.com

• Picalo: www.picalo.org (Free)

• Conversion software

• Cogniview: www.cogniview.com

• Monarch:

www.datawatch.com/products/monarch_overview.php

• Able2Extract:

http://www.investintech.com/able2extract.html

Technology (continued)

• Timeline/Visualization

• LexisNexis Tools: http://www.lexisnexis.com/casemap

• MS Visio: www.office.microsoft.com

• Smart Draw:

www.smartdraw.com/specials/timelines.asp

• Timelinemaker: www.timelinemaker.com

• Research tools

• Library: local neighborhood

• PACER: www.pacer.gov

• Public sites, newsletters: cs@hetheringtongroup.com

External: Client Services

External: Client Services

• Prevention

• Detection/Monitoring

• Investigation

Prevention Services

• Internal control enhancements/recommendations

• Internal control evaluation

• Policy and procedure development

• Anti-fraud program development or evaluation

• Anti-fraud training

Detection/Monitoring Services

• Executive or board member expense account audit

• Employee expense account audit

• FCPA compliance audit

• Large contract compliance audit (customer or vendor

contracts)

• Continuous monitoring program development and/or

exception report development program

• Large vendor audits

• Payroll audits

Investigation Services

• Criminal cases versus civil cases versus other (no

lawsuit involved)

• Employee embezzlement cases

• Security fraud cases

• Insurance fraud cases

• Bankruptcy cases

• Healthcare fraud cases

External: Referral Sources

External: Referral Sources

• Current Relationships

• New Relationships

• Attorneys

• Law Enforcement

• Businesses

• Other

Current Relationships

Don’t be out of sight, out of mind.

New Relationships

• Attorneys—consider the following places:

• Local Bar conferences/meetings

• PACER via lawsuits files

• Law firm websites

• Firm mixers

• Law enforcement or government agency—consider the

following places:

• Local ACFE or other professional organization meetings

• Conferences/Trainings (probably one of the presenters)

• Past or active investigations

New Relationships (continued)

• Business Owners / Executives / General Counsel—

consider the following:

• Professional conferences/meetings/trainings

• Industry conferences/meetings/trainings

• Company websites

• Non-profit gathering

Other Avenues

• Marketing materials

• Website

• Presentations

• Industry and professional organizations

• Advertising

Profitability

Profitability

• Leveraging

• Fee Structure

• Costs

Conclusion

• Perform an assessment

• Set goals

• Measure successes