tag:blogger.com,1999:blog-6581586488456314302.post7958360608010325953..comments2023-12-08T00:05:03.649-07:00Comments on FraudBytes: Iraqi Relief Funds and Fraud [Guest Post]Aaronhttp://www.blogger.com/profile/10138733175602274983noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6581586488456314302.post-45108173351218430472012-07-25T10:11:07.365-06:002012-07-25T10:11:07.365-06:00Rob, you raise an excellent question: what is the ...Rob, you raise an excellent question: what is the best way to deal with fraud and waste? Personally, I took two things away from the SIGIR report: <br />(1) Some things can't be audited after-the-fact. Quality control, pricing checks, contract compliance, etc. are extremely difficult to audit but are vitally important from a managerial perspective. Detective controls are not an adequate substitute for preventive controls. The appropriate level of each is a heavily debated question, but I think we can all agree that pouring all our resources into detective controls isn't as effective as having some detective and some preventive controls.<br />(2) Fraud and waste are real problems. A while ago I saw the ACFE "Report to the Nations on Occupational Fraud and Abuse." Fraud, theft, and waste occurs all the time, often at small companies and by regular people. The items found in the SIGIR report weren't financial statement fraud or a single person stealing a billion dollars. In fact, an external auditor wouldn't care about most of the items on the SIGIR report for purposes of the financial statement audit. Rather, they were a large number of small things that could happen at anywhere, not just in government. So often I see students glaze their eyes over when we talk about internal controls. This is just another example of how often fraud exists in the real world.Jeremy Bentleyhttps://www.blogger.com/profile/05014634728437047998noreply@blogger.comtag:blogger.com,1999:blog-6581586488456314302.post-52904471899583374702012-07-24T23:34:44.080-06:002012-07-24T23:34:44.080-06:00I understand the frustration and myself am appalle...I understand the frustration and myself am appalled at the waste and abuse of the current system. But are you advocating for more government regulations and levels of bureaucracy? I think systems of preventative internal controls are appropriate but I'm not convinced about adding to government. I don't believe any form of controls will hold water in these situations. Too much lack of control in places too far away. Not to get political but the real solution is not to open the cookie jar by entering into situations like this.<br /><br />Nice post though Jeremy. I enjoyed seeing your name attached.robhttps://www.blogger.com/profile/09447618079300400081noreply@blogger.com