Fraud Summit – IAEP

The 19th Annual Fraud Summit, presented by the Center for Internal Auditing Excellence (CIAE) at the Naveen Jindal School of Management, brought together auditors at several levels to gain insights on how to take their game to the next level as they deal with the games that fraudsters play. 

Well over 500 people attended the March 22 conference and nearly 300 participated in the workshop the day before. 

Case in point was a presentation by Leah Wietholter, CEO and founder of Tulsa, Oklahoma-based Workman Forensics, who shared the case studies of fraudsters “Bill” and “Scott.” Like an involving Agatha Christie novel, Wietholter laid out a mystery for the auditors to unravel, stretching their logic muscles to figure out clues of the crime. Entertaining and interactive, Bill’s story she dubbed “The Case of the Mancave” and Scott’s “The Case of the Sneaky CFO.” 

“For the first case, Bill has limited access and could write checks and could hide,” she said after her presentation. “Scott, he could do anything he wanted. He could issue checks to himself, use credit cards. Because he had access to so many things, he could steal in a variety of ways.” 

Wietholter, who is the author of the book Data Sleuth: Using Data in Forensic Accounting Engagements and Fraud Investigations, said the stories are for accountants’ and internal auditors’ understanding of where the best evidence can come from. 

“If there is a case of fraud at a company, I wanted to show them how to have vision and not just for finding internal documents,” she said. 

Wietholter believes there are multiple advantages to learning through these cases. 

“We remember stories,” she said. “And if you don’t remember all of it, you’ll at least remember the person who told it. And then you have a resource to call up. Listen to stories, connect with stories, it will make you better.” 

As has been a regular practice of the Summit, someone who committed fraud themselves shared their story. Previous speakers include Frank Abagnale, his exploits and rehabilitation made famous in Steven Spielberg film Catch Me if You Can. 

This year audience members heard the story of Tipper X, otherwise known as Tom Hardin, who explained how he got involved in insider trading and ultimately worked with the FBI when it came to others involved in criminal activities. He explained how he committed his crime but also the aftermath, the limitation of employment, the shame he felt, the effect on people in his life and how he resurrected his life. 

“I always tell people if you ever got to that line, just think about who might be impacted if you were to cross over,” he said. 

Anthony Pugliese, president and CEO of the Institute of Internal Auditors, gave an outlook for the profession. From data collected, he said the expectation is that artificial intelligence will continue to grow, that a focus should be on looking at its generating of misinformation and disinformation and an action to take for the industry is to upscale in AI. Other actions to take include preparing for new Global Internal Audit Standards. 

“Strengthen training and awareness to combat cyber attacks…” he said. “…Hand in glove with the AI, but it’s going to become more and more difficult. Proactively broach emerging topics and risks with the board. One of the most, I think, debated parts of our new global standards are governing the internal audit function and you’ll see in that required communications with the board…And then create a portfolio of policies, procedures and best practice for responsible AI implementation. And that could be just starting with saying, ‘Is the board aware and proactively engaged in what we’re doing with AI within the company?’” 

Wietholter also gave a talk, offering another fraud story example, this one “The Case of the Cash Back Payroll Scheme.” This included overpayments of payroll to several employees and allowed a chance to delve into investigative priorities. 

Mauriello said a hallmark of the conference and workshops is the experiential aspect. 

“It’s not so easy just to go out and be a professional skeptic,” said Mauriello, who estimates the conference has had around 12,000 attendees over the years. He shared with the audience that proceeds from the event go to benefit the scholarships and endowment for the CIAE. 

“You think through how things work in real life, setting up these cases, giving you that real-life experience,” he said. “This work can be very much thinking outside of the box and auditors and accounting can get trapped in everything being a checklist. The interest is there for our conference because people know this is a high-demand skill set.” 

Mark Salamasick, the founder of the Summit and former director of the CIAE, pointed out how students can possibly get jobs just from working the event, one that attracts members from some of the largest accounting firms in the country to attend. 

“Students can possibly change their lives by being a part of this event,” he said. “First, they get exposed to this kind of employment in a different way and see the excitement of it and the skills it takes. This event can be just as valuable, or even more valuable, than going to the usual meet-and-greets with companies also. Companies like to meet students in a different kind of setting than that. They can see the professionalism of our students, get a sense of what kind of people they are. Many students have benefited from being a part of the event…It’s also a great chance for companies to see our campus who may not have had a chance to and to understand better what the business school is doing. It’s one thing to hear about the business school, it’s another thing to see it.” 

Brad Holloway, an internal auditor at Parkland Hospital, said he appreciated how the event can expand your thinking. 

“You get insulated as an internal auditor in your own organization and own department,” he said. “You learn how people do things in their own organizations and you can take it back with you. It’s easier to stay engaged with the stories in sessions of real-life situations. It helps you learn in another way and you relate on a different level. People don’t realize how challenging our jobs are. It’s a good reminder and shows you how to think more critically in your position.” 

Michael Khoury, chief operations officer at Texas Life Insurance Company, also appreciates how the stories brought lessons to life. 

“I think the most valuable part of the conference is it gives people in our profession examples of how people steal money, the process of trying to discover their actions and you gain much from spending time going through the examples,” he said. “I’ve been to this conference multiple times and always come away with something valuable. You get former criminals that come here and they explain how they did it and why they did it. Those working in fraud get to have a better understanding. And it always starts with opportunity. It’s also about learning internal controls that could be better. Criminals figure out poor internal controls and come up with a plan. This can help us when it comes to crime.” 

Angela Wilkinson, a staff auditor at Army and Air Force Exchange Service, said that a positive aspect of the Summit came from different levels of positions being in attendance. 

“I think a major strength of the conference is that it brings people from all different backgrounds and industries together, but they share the same need,” she said. “We’re here to make things better.”