In recent years, many accounting frauds have undermined investors’ confidence in the reliability of financial reporting. The sheer number of cases of financial reporting fraud and the inability of certified auditors to uncover the fraud is shocking and discouraging. The solution to this threat definitely lies in fraud prevention, which is what this book, called “Guide to Fraud Prevention”, is about.
It is written by Waheed Aremu, who has over 10 years of experience in anti-fraud activities, much of which was gained from the statutory audit functions and the banking sub-sector. Aremu has a Bachelor of Science in Accounting from Obafemi Awolowo University, Ile-Ife, Osun State and a Master of Business Administration from 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 the unethical conduct of high-level officials in the organizations. Aremu points out that fraud also has systemic effects on the global economy, which is why this book has been written to offer fraud prevention strategies. He says that nobody is born to be fraudulent; rather, people gradually fall into 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. Yet it seems that adequate attention is not being paid to this threat. 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 accusations of fraud and the way in which they are perpetrated catch people off guard. He says that the scammers are ordinary people who simply exploit the loopholes within the system. This author adds that it is also interesting to note that experiences with fraud indicate that perpetrators go through various nuances of human activity. 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 makes it clear that fraud slowly erodes jobs and investments and has a negative impact on corporate reputation or brand image.
Educates that there is no universally accepted definition of fraud, adds that, however, fraud is not an abstract concept 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 topic of overcoming the challenges of fraud. Here, Aremu explains that the challenges of fraud are not small in any human setting. He says that in modern organizations, the challenges of fraud manifest themselves 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, law enforcement and regulatory 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 for 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 for understanding fraud prevention; effective framework for fraud prevention and corporate governance.
Chapter six is entitled “Role of key actors”. This author states here that the task of ensuring the success of corporate governance is a collective one and each stakeholder 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 party to 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 quadrant and the fraud risk categories is part of the stylistic creativity of this book. A low-impact, low-frequency quadrant is identified as rabbits. The second quadrant of high impact and low probability is represented by bears. The third quadrant of low impact but high probability is represented by dogs, while the high impact and high probability is represented by snakes.
The title of the text is short but assertive. Aremu makes extensive use of graphics to visually expand the scope of readers’ understanding. The cover design is graphically simple but non-verbally communicative. The language is simple while the ideas are clearly presented.
An error is noted on the outer back cover as follows: “…has over a decade of experience in anti-fraud and control activities, much of which was 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.