Rescuing the Company

How CFEs Can Save Firms from Bankruptcy


By Indra Djaja Utama

2010-NovDec-RescuingTheCompany 
Top executives can drive their companies close to bankruptcy because it’s often easy for them to circumvent controls. “Bob” was the deputy president director of a branch of an international technical consulting firm with its head office in Europe. He was able to make false disbursements of cash totaling approximately US$250,000 over two years because this branch firm didn’t have an internal auditing department. The head office’s internal auditors came about twice a year to review the branch firm’s compliance with technical rules and procedures, but they never conducted actual financial audits. (A deputy president director is similar to an American chief operating officer.)

The branch firm’s president director (similar to an American company president or CEO), who had very limited knowledge of accounting and finance, unwittingly verified and approved the fraudulent disbursements. He trusted Bob because they were longtime friends, and he let Bob approve disbursements without requiring his own authorization.

  

 


For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.

Related Articles

To Catch a Thief

Fraudsters won’t get away with their crimes if you employ the powerful proof-of-cash method to draw them out and reel them in.

Fighting Money Laundering ‘Pirates’

Global money laundering has been a problem for those navigating international waters with ill-gotten gains since the piracy days of Edward Teach (“Blackbeard”) and John Rachham (“Calico Jack”).

Fraud Down Under

Interview with Russell Smith, Ph.D., principal criminologist and manager of the Global, Economic and Electronic Crime Program at the Australian Institute of Criminology.