Ann Baldwin – An honest face is never enough

Hugh Eaves allegedly has admitted to losing millions of pounds belonging to his former Phillips & Drew colleagues. There have been cries of astonishment that such sophisticated men could be duped. But if you can’t trust your friends, chartered accountants at that, who can you trust?

When I was a trainee, a wonderful man taught me how to audit. He was in his fifties, highly intelligent and very professional. After many years in practice, he joined a client company as finance director.

I was leading the audit team when gossip circulated about his gambling and drinking.

On a hunch I called for all five petty cash boxes to be collected and the money to be counted at the same time.

They were full of his IOUs. Further investigation uncovered fiddled expenses.

It was a very sad day in my working life to turn in the man who’d taught me about integrity and professionalism. He left the company and travelled around – bouncing cheques on former clients. My principal had to write to all our clients and warn them about him.

Not long ago, a colleague I had worked with for over 20 years admitted to stealing around £1m of client money over a long period.

This was a man who had given me excellent professional advice, who personified probity and who was called in to check on other partners’ work if there was a whiff of a problem. Now he’s serving time in jail.

No doubt they all expected to make good the losses: the first and third examples by successful stock-market selection and the second by some better luck on the horses.

My preference has always been to trust people, but when it comes to money my experience tells me that the most unlikely people will let you down.

This thought crossed my mind as I watched the chairman of the investment club I’ve just joined sign half a dozen blank cheques for the treasurer.

They’ve known each other for years.

Ann Baldwin, FCA, is a management trainer and conference speaker.

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