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Copyright © 2018 by Association of Certified Fraud Examiners. All rights reserved.
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Library of Congress Cataloging-in-Publication Data:
Names: Wells, Joseph T., author.
Title: International fraud handbook / Dr. Joseph T. Wells.
Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Includes
index. |
Identifiers: LCCN 2018017403 (print) | LCCN 2018017692 (ebook) | ISBN
9781118728550 (Adobe PDF) | ISBN 9781118728536 (ePub) | ISBN 9781118728505
(hardcover)
Subjects: LCSH: Fraud. | Fraud–Prevention. | Fraud investigation. |
Fraud–Law and legislation.
Classification: LCC HV6691 (ebook) | LCC HV6691 .W454 2018 (print) | DDC
364.16/3–dc23
LC record available at https://lccn.loc.gov/2018017403
For Andi McNeal
This book would not have been possible without her superb efforts.
My 40-year career has been devoted to the investigation and prevention of white-collar crimes. And while I have witnessed much change, I have also seen so much stay the same.
Through the ebbing and flowing trends and the technological advances, I have learned several enduring lessons about fraud and human nature. First, fraud is timeless; as long as people are put in positions of trust, fraud will occur. Second, the variations on fraud are not limitless. As explored in my previous publication, Corporate Fraud Handbook, frauds tend to fall into time-tested and universal categories. Finally, ignoring the problem will never solve the problem. In fact, quite the opposite is true: all organizations are inherently vulnerable to fraud, but the ones that are reluctant to admit it are the ones most at risk.
Along with these truths, I have also seen the evolution of our profession. Technology has helped both the fraudsters and the fraud fighters accomplish their tasks more effectively and efficiently. Governments in numerous countries have enacted new regulations and bolstered their enforcement efforts against fraud, resulting in an increased focus on compliance in many organizations. Business operations – and frauds – now routinely span geographical borders, requiring new knowledge and skill sets for those attempting to prevent, detect, and investigate white-collar crimes. As the fraud examination profession has grown globally and the fight against fraud has grown more complex, the need for information and professional connection has never been greater.
It is out of this need, demonstrated by the numerous and increasing requests that the ACFE receives every year for resources to assist in this international effort, that the inspiration for this book arose. It focuses solely on combatting those frauds perpetrated against organizations; frauds against individuals are pervasive and devastating, and consequently merit separate, in-depth discussion.
The foundation for effectively addressing fraud against organizations – the tools of the trade used to prevent, detect, and respond to these crimes – look about the same throughout most of the world. However, important geographical nuances and considerations exist. Thus, to help fraud examiners everywhere, the material in this book is provided in two parts:
Much like the fight against fraud, this book was truly a global effort. Each section discussing specific countries in Part II lists the specific ACFE members who contributed that material. My deepest gratitude to these volunteers – listed individually in the Acknowledgments section – who helped us with this significant undertaking.
My appreciation also goes to the members of the ACFE team who helped research, compile, and review various parts of this publication. In particular, I’d like to thank John Gill, JD, CFE; Andi McNeal, CFE, CPA; Ron Cresswell, JD, CFE; Jordan Underhill, JD, CFE; Mason Wilder, CFE; Bobbie Dani; and Mark Blangger.
And finally, my thanks and admiration go to the fraud fighters everywhere who have dedicated their professional lives to the prevention and detection of fraud. As the first US president, George Washington, said, “Truth will ultimately prevail where pains is taken to bring it to light.” By sharing information and joining forces as part of the worldwide anti-fraud community, we can continue to bring truth to light and be successful in the global fight against fraud.
Dr. Joseph T. Wells
Austin, TX
February 2018
Thanks to the following individuals for their time and effort in assisting with this publication. The information they provided in Part II of this book is invaluable in highlighting the anti-fraud environment and resources in their respective countries.
Syed Zubair Ahmed, MBA, CFE, MCom
Gertrudis Alarcon, CFE
Abdallah Alomari, CFE
Mukesh Arya, CFE
Tomasita Pazos Aurich, CFE, CRISC
Adel Ayyoub
S.K. Bansal, CFE
Alison Benbow, CFE, CMIIA
Vibeke Bisschop-Mørland, CFE
Dom Blackshaw, CFE
Thomas Bøgballe, CFE
Stefano Bordoli
Dr. Jose A. Brandin, MBA, CFE, CIA, CISA
Muna D. Buchahin, PhD, CFE, CFI, CGAP, CRMA
Bandish Bundhoo, CFE
Nereyda López Canales
Piotr Chmiel, CFE, CISA, CIA
Sun Hee Cho
Shamsa Dagane, CFE
Dr. Anna Damaskou, CFE, PhD, LLM
Sandra Damijan, PhD, CFE
Fadi Daoud, MBA, CACM, CIPT
Roger Darvall-Stevens, MBA, MA, CFE
Mario B. Demarillas, CFE, CPISI, CRISC, CISM, CISA, CIA
Evangelia Dimitroulia, CFE, CIA
John Ederer, CFE, FCA
Hossam El Shaffei, CFE
Mahmoud Elbagoury, GRCA, CPFA, CICA, CACM
Hossam Elshafie, CFE, CRMA, CCSA, CFCI
Hazem Abd Eltawab
Edward J. Epstein, LLB, LLM
Marco Antonio E. Fernandes
Dante T. Fuentes, CFE, CPA, CAMS
Atty. Laureano L. Galon Jr., CFE, CPA
Gertjan Groen
Makito Hamada, CFE, CPA
Tim Harvey, CFE, JP
Sandra Hauwert, CFE
Adv. Jan Henning, SQ
Pavla Hladká, CFE
Francis Hounnongandji, CFE, CFA
Shun Hsiung Hsu, CFE, CPA
Katie Huchler, CFE
Siti Zeenath Shaik Ibrahim
Vladimir Ikonomov, CFE
Jaco de Jager, CFE
Wong Siew Jiuan, CFE
Peter Juestel, CFE, CAMS
Deoraj Juggoo
Agata Kamińska, Master in International Relations
Hyeon Kang, CFE
Maheswari Kanniah, CFE
Andrew H. Kautz, CFE
Umaer Khalil
Robert Kilian, CFE
Kwang Jun Kim
Mojca Koder, CFE
Aniket Kolge
Sara Koski
Mihael Kranjc
Sharad Kumar, CFE
Eric Lasry
Jun Ho Lee
Dr. Sheree S. Ma, CPA
Sumit Makhija, CFE
Jose Damian Garcia Medina, CFE
Nicoleta Mehlsen, MBA, CFE
Ahmed Mokhtar, CFE, CRMA
Iyad Mourtada, CFE, CIA, CCSA, CRMA, CSX
Bernard M. K. Muchere, CFE
Lukelesia Namarome, CFE
Ralf Neese, CIA
ACFE Jordan Chapter Board Member
Carsten Allerslev Olsen, CFE
Miguel Angel Osma, CFE
Zulhisham Osman
Luis Navarro Pizarro
Chris Porteous
Tony Prior, MBA, CFE, CAMS
Sagar Rajkumar, MBA, CFE, PJSC
Andrea Rondot, CFE
George Rostantis, CFE
Pooja Roy, CA
Raymond A. San Pedro, CPA, CICA
Dong Woo Seo, CFE
Hazem Adel Shahin, CFE
Sameh Abu Shamaleh, CFE
Mukul Shrivastava, CFE, CA
Rajkumar Shriwastav, CFE, Lawyer
Arpinder Singh, CFE, CA, Lawyer
Tae Kyung Sung, PhD, CFE
Agis Taramides, CFE, FCA
Sabrina Tatli-Van der Valk
Pedro Trevisan, CFE
Sachie Tsuji, CFE, CPA
Ayumi Uzawa, CFE, CPA
Adv. Chris van Vuuren, CFE
Josephat K. Wainaina, CFE
Loes Wenink, CFE
Caoyu Xu
Toshiaki Yamaguchi, CFE
Rodrigo Yáñez
Sherlyn Yeo
George Yiallouros, CFE
Nagy Mohammed Ibrahim Yousef
Daisuke Yuki, CFE
Hervé Zany, CFE
The Association of Certified Fraud Examiners (ACFE) is the world’s largest anti-fraud organization and premier provider of anti-fraud training and education. Together with nearly 85,000 members, the ACFE is reducing business fraud worldwide and inspiring public confidence in the integrity and objectivity within the profession.
Established in 1988, with headquarters in Austin, Texas, the ACFE supports the anti-fraud profession by providing expert instruction, practical tools, and innovative resources in the fight against fraud. The ACFE hosts conferences and seminars year-round while offering informative books and self-study courses written by leading practitioners to help members learn how and why fraud occurs and to build the skills needed to fight it effectively. Members of the ACFE also have the ability to expand their anti-fraud knowledge and assert themselves as experts in the anti-fraud community by obtaining the Certified Fraud Examiner (CFE) credential. This globally preferred certification indicates expertise in fraud prevention, deterrence, detection, and investigation.
The ACFE oversees the CFE credential by setting standards for admission, administering the CFE examination, and maintaining and enforcing the ACFE Code of Professional Ethics.
The ACFE is also committed to providing educational resources to the academic community and has established the Anti-Fraud Education Partnership to address the unprecedented need for fraud examination education at the university level. In pursuit of this objective, the ACFE has provided free training and educational materials to institutions of higher learning throughout the world.
Criminologist and former FBI agent Dr. Joseph T. Wells, CFE, CPA, is chairman and founder of the ACFE. Dr. Wells has lectured to tens of thousands of business professionals, and is the author of 22 books, and scores of articles and research projects. His writing has won numerous awards, including the top articles of the year for both the Internal Auditor and the Journal of Accountancy magazines, and he is a winner of the Innovation in Accounting Education Award presented by the American Accounting Association. He was named nine times to Accounting Today magazine’s annual list of the “Top 100 Most Influential People” in accounting. In 2010, for his contributions to the anti-fraud field, he was honored as a Doctor of Commercial Science by York College of the City University of New York.
Labeled “the premier financial sleuthing organization” by The Wall Street Journal, the ACFE has also been cited for its efforts against fraud by media outlets such as the BBC, U.S. News & World Report, The New York Times, CNN, CNBC, Fortune, ABC-TV’s Nightline and 20/20, and CBS News’ 60 Minutes.
Further information about the ACFE is available at www.acfe.com, or 800-245-3321.