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To: Jim Carino, CCP From: Ross Financial Services, Inc. Date: September, 2002 Re: The Investigator’s Role in Reducing Business Risk Now is the time for investigators to step up and claim our unique role in reducing business risk. It is obvious that public accountants have not been successful in fulfilling that responsibility. We all know that figures can lie and the ancient art of cooking the books is alive and well, as evidenced by the eruption of recent accounting scandals. There have been rumblings that the solution lies in doing a more thorough auditing job or more vigorously challenging figures proffered by management, but these hardly appear to be magic bullets for getting at the truth, especially when fraud is involved…. The problem is we are relying on the wrong profession to come up with the solution. It is the investigator who is trained to question, question, question. An investigator is never so intimidated by credentials that he fails to ask questions and verify claims. Is the office parking lot being resurfaced or is a residential swimming pool being built at shareholder expense? Are the vendor invoices legitimate? Are there mistaken journal entries? While the accountant focuses only on the numbers, the investigator asks the tough questions behind the numbers that will get at the heart of the fraud. An investigator respects everyone but is intimidated by no one. Perhaps the principal difference between accountants and investigators is their frame of mind. In the accompanying article from the Mergers & Acquisitions Journal, Larry Ross, president of Ross Financial Services, Inc., points out why investigative techniques must be employed in order to decipher financial schemes. Investigators, not accountants, are geared up to ferret out fraud. |