PracticeAccounting FirmsOn the money with Gavin Hinks

On the money with Gavin Hinks

Conrad Black. A name that, since his conviction on fraud charges last week, looks set to live on in infamy

gavin hinks, accountancy age

I can’t help noticing another name, though, when I read the reports of
Black’s underhand dealings and the $6m (£2.9m) fraud at Hollinger – Jack
Boultbee, the CFO.

Boultbee claimed his participation at Hollinger was no more than legitimate
tax management – a defence which, since he was found guilty with Black, not only
tarnished the reputation of CFOs, but of tax experts too. A double whammy for
the profession.

If you a recall other names such as Andrew Fastow, the CFO serving six years
for his fine financial management at Enron, plus Scott Sullivan, doing a
five-year stretch for tinkering with the numbers at WorldCom, you’ve got a
veritable litany of CFOs who can’t keep their fingers out of the till.

Does this make all CFOs crooked? Of course not, but Boultlee’s conviction
will certainly add to public perception that you need a really good accountant
to pull off a big fraud. So thanks, Jack, for bringing the profession into
disrepute, again.

It’s not all doom and gloom. Grant Thornton reports that 33% of frauds are
caught by external auditors, while more than half are unearthed by internal
controls. The point being here that accountants do a fairly good job at finding
and stopping someone getting away with the loot.

Only 10% of fraud is ever made public, Grant Thornton reports, and I suspect
there lies the problem. Accountants don’t do enough shouting about their good
works, what with client confidentiality and all that. It’s a difficult issue to
overcome. No one wants their dirty financials aired in public, so it seems a
pity it happens only after the Boultbees, Fastows and Sullivans of this world
have done what they do.

Gavin Hinks is the editor of Accountancy
Age

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