“Tragedy of Fraud” e-book now available at Amazon

(Cross-posted from my other blog, Attestation Update.)

“Tragedy of Fraud – The Ripple Effects from Fraud and the Wages Earned” describes the tragic consequences from fraud.

There are ripple effects that spread out to harm innocent bystanders.  The perpetrator draws a wide range of well-deserved wages that will be paid in full.

The book looks at two fraud incidents to learn what happens after a fraud is discovered. One took place in a local megachurch and the other in the mayor’s office of a small city.

The book closes with a discussion of the fraud triangle. That’s the idea that three components need to be present for a fraud to take place – opportunity, motivation, and rationalization. There are steps an organization can take to reduce those factors.

You can find the book at Amazon here.

This book is a compilation of blogs posts that have been previously published at Nonprofit Update and Attestation Update. The posts have been edited slightly and reorganized for easier reading.

Major sections of the book: Continue reading →

Level of Services Provided by a CPA – The Differences Between Compilations, Reviews, and Audits

(cross-posted from my other blog, Nonprofit Update.)

There are three different levels of services you could obtain from a certified public accountant.  These are referred to as compilation, review, and audit.

Financial statements are presented on the basis of some set of accounting rules. This is referred to as the financial reporting framework.

The vast majority of the time, this would be a large body of knowledge that is called generally accepted accounting principles, or GAAP. Imperfect in implementation though it may be, the concept is that similar transactions will be recorded by all organizations in the same way. In addition, financial statements of similar organizations will actually look similar.

If there is some unique reason to do so, the financial statements could be presented on another basis of accounting

Compilation

Continue reading →

‘Tragedy of Fraud’ in e-book format – soon to be released

(Cross posted from my other blog, Nonprofit Update.)

Tragedy of Fraud – The Ripple Effects from Fraud and the Wages Earned will be released soon in Kindle format. This is a compilation of blog posts about the damage caused by fraud. It will also discuss the fraud triangle.

The sections of the book are: Continue reading →

YouTube views of cartoons increasing

Views on YouTube for all my cartoons have been running about 50 a week during 2012. For reasons I cannot detect, the traffic on the two main cartoons has surged.

In three weeks, there 363 viewings of part 1.  In those same three weeks, part 2 was watched 108 times.

Total views to date for part 1 are 2,030 with total views for part 2 at 385.

Each cartoon is about 8 minutes.  Here are the links:

Bank reconciliations and offering count procedures:

 

Good procedures protect from false accusations:

Some traps church business administrators need to avoid

(cross-post from my other blog, Nonprofit Update.)

The urgency of things that must be addressed now can take focus away from bigger issues that have long-term payoff.  Verne Hargrave, CPA, of PSK has started a good series on traps that business administrators can fall into because of tyranny of the urgent.

Looks to be a very helpful series. Would be worth your time to visit his blog regularly. Maybe even set it up on your RSS feed.  I’ll highlight it occasionally.

Ten Things to Avoid  in Church Administration starts the discussion. Mr. Hargrave points out a few problems that can arise if tyranny-of-the-urgent takes over your life: Continue reading →

“Once Upon Internal Control” is available on Kindle platform

My tale on internal control done well and poor at two churches is now available in Kindle format at Amazon.

Price is $0.99.

You can read the book on your Kindle device, on any smart phone with a Kindle app, or on your computer using the Kindle-for-PC application.

At Amazon, search for my name, Ulvog, or the book title, Once Upon Internal Control.

Or click here to go directly to the book.

Keep track of your church’s equipment and property – how and why

(cross-posted from my other blog, Nonprofit Update.)

A local church should keep track of its equipment, improvements to property, and building.

You will definitely need that information if you have an audit, review, or compilation of your financial statements.

A far more common reason to accumulate that information is for insurance purposes. In the event of a tragedy such as earthquake, tornado, or hurricane, you will need to have some detail records to present to you insurance company to get full recovery for your loss. Continue reading →

Summary of the first and second cartoons

The extro of part 2 is found at the following link. This summarizes the cartoons and provides three reasons why internal controls protect your staff:

Good procedures:

  • protect the strong from temptation
  • protect the weak from  opportunity
  • protect the innocent from false accusation.

 

 

 

Index of cartoons

There are six cartoons that give visual explanations of how to structure internal controls at a local church.  Since four short cartoons are combined in pairs to make the two feature cartoons, I thought it would help to give an index of how the cartoons are organized with links to each one.   Here is a picture of how the individual cartoons are structured:

Part 1 and 2 each have an intro and extro.

Sad example of the need for disbursements controls

(previously posted at my other blog, Nonprofit Update)

 See this article for a sad illustration of disbursement fraud.  The specific technique was opening credit card accounts in the name of the company and then using the account for personal expenses. 

Continue reading →

Fraud Triangle

People who study fraud tell us there is a “fraud triangle”. Remember discussing the fire triangle when you were in Boy Scouts or Girl Scouts? Just like you need to have heat, fuel, and oxygen to kick off a fire, you need to have opportunity, motivation, and rationalization to kick off a fraud incident.

I have written a series of posts on my other blog, Nonprofit Update, about the fraud triangle.

I combined the posts into one page so you can see all the discussion together. See the Fraud Triangle.

Simple way to improve internal controls over disbursements

(previously posted at my other blog, Nonprofit Update)

What could you do when there aren’t enough staff to have someone other than the bookkeeper prepare the bank reconciliation?  Bank recs are complicated.  For many small organizations, the staffing is so thin that there is no one other than the bookkeeper who has the skills to prepare them.  What to do when you just can’t split up those duties?

Continue reading →

Illustration of internal control from the Scriptures – one good example and one not so good

(cross-post from my other blog, Nonprofit Update)

Maintain dual control over the offering! You hear that unending refrain from us accountants.

Document those disbursements!  Another routine comment you hear.

One story in scriptures has a good illustration of the first control along with missing the boat on the second idea.  Jehoiada, the priest during the reign of King Joash, did a good job on the dual control over the offering and not so great on accountability for the disbursements.

Continue reading →

Tragedy of Fraud

The impact of a fraud incident in a local church is devastating. The repercussions spread out like the ripples of a rock thrown into a calm pond.

I have written a series of posts on my other blog, Nonprofit Update, about a major fraud at a church near me. I have a number of friends who worship there, so this disaster is quite real to me.

I combined the posts to one page so you can see the discussion chronologically. This series is called the Tragedy of Fraud.

Good procedures protect against false accusations – feature cartoon #2 from Once Upon Internal Control

Good procedures protect the innocent from false accusations. This fable tells the tale of how a local church rides out made-up stories being researched by a reporter.