What do minor league baseball, candy and cupcakes have in common? For Cindy Durtschi, Ph.D., an associate professor at DePaul University, they make great topics for instructional cases in fraud examination. (More on that in a bit.)
Learning by doing — or "problem-based learning" — has proven to be an effective method for motivating students to acquire necessary skills for detecting and preventing fraud.
According to Durtschi, cases help deliver students beyond textbooks and develop life skills. She says professionals must be able to:
- Make decisions with incomplete information.
- Determine needed information and where to find it.
- Synthesize collected information to solve problems and make decisions.
- Be comfortable if there isn't one "right" answer and defend his or her assumptions and choices.
Tom O'Connor, while working as an IT specialist at a public accounting firm, was struck by how a case he worked was so similar to a simulated classroom scenario in his first university fraud examination course. O'Connor, a former student of mine and now a senior IT auditor at a large regional bank in Buffalo, New York, had to wait until the FBI finished its investigation to discover all the details of the fraud and if his conclusions were correct.
The fraud O'Connor investigated involved weak internal controls in the purchasing area. A fraudster employee was structuring transactions to avoid higher levels of authorization for purchasing goods. He shipped purchases to a residential address — his home — and then sold them to a friend. O'Connor discovered many red flags including irregularities in the inventory numbers when compared to business needs.
"As I attempted to connect the dots throughout the investigation," O'Connor says, "I felt as if I already knew the perpetrator's next step. My classroom case experience gave me the confidence to trust my instinct and the skills to ultimately assist in bringing the fraudster to justice."
According to Dr. Joseph T. Wells, CFE, CPA, founder and Chairman of the ACFE, a successful fraud examiner is part detective, lawyer, accountant and criminologist. The ACFE has identified professional skepticism among the necessary top skills and abilities fraud examiners need to detect and prevent fraud. Educators can use problem-based learning to develop that attitude in students and professionals.
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