Evaluation of Fraud Examinations: The Case of Inappropriate Accounting Practices at Fuji Xerox

ABSTRACT

There is a growing business for global auditing firms and local law firms as well as independent detectives to conduct forensic investigations at client organizations when there is suspicion of white-collar misconduct and crime. Client organizations normally do not disclose investigation reports. An investigation report concerned with inappropriate accounting practices at Fuji Xerox in New Zealand is publicly available. This article presents an evaluation of the investigation. Specifically, this article focuses on the mandate, where examiners were asked to find causes of misconduct. Examiners present eight reasons for inappropriate accounting practices. However, as discussed in this evaluation, the report of investigation presents little or no evidence for most of the causes.     

Policy theories,knowledge utilization,and evaluation

Frans L. Leeuw (Ph.D. in Sociology) currently is Director of The Netherlands’ Court of Audit Department of Policy Evaluation. He also holds the chair of Professor of Policy Effectiveness Research at Utrecht University. Recent publications on policy theories, similarities and dissimilarities of auditing and evaluation research and on the utilization of policy research by government officials.     

Eliminating recency with self‐review: the case of auditors' ‘going concern’ judgments

This paper examines the use of self‐review to debias recency. Recency is found in the ‘going concern’ judgments of staff auditors, but is successfully eliminated by the auditor's use of a simple self‐review technique that would be extremely easy to implement in audit practice. Auditors who self‐review are also less inclined to make audit report choices that are inconsistent with their going concern judgments. These results are important because the judgments of staff auditors often determine the type and extent of documentation in audit workpapers and serve as preliminary inputs for senior auditors' judgments and choices. If staff auditors' judgments are affected by recency, the impact of this bias may be impounded in the ultimate judgments and choices of senior auditors. Since biased judgments can expose auditors to significant costs involving extended audit procedures, legal liability and diminished reputation, simple debiasing techniques that reduce this exposure are valuable. The paper also explores some future research needs and other important issues concerning judgment debiasing in applied professional settings. Copyright © 2002 John Wiley & Sons, Ltd.     

Private Investigations of White‐Collar Crime Suspicions: A Qualitative Study of the Blame Game Hypothesis

The activity of private investigations by fraud examiners is a business of lawyers, auditors, and other professionals who investigate suspicions of financial crime by white‐collar criminals. This paper presents results from an empirical study of investigation reports. The available sample consists of 28 reports written mostly by auditing firms such as Deloitte, Ernst & Young, and PwC. The blame game can occur at two stages in a private investigation. First, the mandate formulated by a client may point investigators in a specific direction. Next, investigators sometimes suffer from a tunnel view of predetermined opinions. In the sample of 28 investigations reports, more than half of them involve potential blame game victims. Copyright © 2014 John Wiley & Sons, Ltd.     

Audit in psychoanalytic psychotherapy with children and adolescents

The importance of multidisciplinary audit in child and adolescent psychiatry, including the work of child psychotherapists, is discussed. Research is highlighted which shows that certain groups of children in particular benefit from psychoanalytic psychotherapy. The problems related to auditing psychoanalytic psychotherapy are discussed, and a possible method of audit based on peer review of notes, which takes into account both inner and outer change, is presented.

A patient is discussed whose notes have been audited using the audit form. It is suggested that this form of audit has good educational potential as well as ensuring a high standard of patient care.     

A Tale of Two Perspectives: Regulation Versus Self-Regulation. A Financial Reporting Approach (from Sarbanes–Oxley) for Research Ethics

Reports of research fraud have raised concerns about research integrity similar to concerns raised about financial accounting fraud. We propose a departure from self-regulation in that researchers adopt the financial accounting approach in establishing trust through an external validation process, in addition to the reporting entities and the regulatory agencies. The general conceptual framework for reviewing financial reports, utilizes external auditors who are certified and objective in using established standards to provide an opinion on the financial reports. These standards have become both broader in scope and increasingly specific as to what information is reported and the methodologies to be employed. We believe that the financial reporting overhaul encompassed in the US Sarbanes?COxley Act of 2002, which aims at preventing accounting fraud, can be applied to scientific research in 4 ways. First, Sarbanes?COxley requires corporations to have a complete set of internal accounting controls. Research organizations should use appropriate sampling techniques and audit research projects for conformity with the initial research protocols. Second, corporations are required to have the chief financial officer certify the accuracy of their financial statements. In a similar way, each research organization should have their vice-president of research (or equivalent) certify the research integrity of their research activities. In contrast, the primary responsibility of the existing Research Integrity Officers is to handle allegations of research misconduct, an after-the-fact activity. Third, generally accepted auditing standards specify the appropriate procedures for external review of a corporation??s financial statements. For similar reasons, the research review process would also require corresponding external auditing standards. Finally, these new requirements would be implemented in stages, with the largest 14 research organizations that receive 25% of the total National Institutes of Health funding, adopting these research oversight enhancements first.     

Impact of Internal Auditing on Branch Bank Performance: A Field Experiment

We conducted an experiment to assess the contribution of internal auditing to organizational effectiveness. We randomly assigned 224 bank branches to experimental conditions (audited or not audited) and monitored their performance for a year. Performance significantly improved during the half year following the audit in the experimental branches, in contrast to a decline in the control branches due to poor general business conditions. The contribution of auditing to performance is discussed in terms of learning, motivation, deterrence, and process improvement.     

Integrity,Objectivity, and Accountability in Private Internal White-collar Crime Investigations: The Case of Moscow School Investigation in Norway

It is often argued that private internal investigations suffer from lack of integrity, lack of objectivity, and lack of accountability. Private internal investigations are paid by clients who order an extraordinary examination of suspicions of misconduct and crime. Clients hire fraud examiners from law firms, auditing firms, and consulting firms to carry out investigations. Based on a mandate from the client, investigators conduct a goal-oriented data collection to reconstruct the past. Unfortunately, limited scope, time pressure, resource constraints, and other factors in investigations may cause results such as victims of blame games. In this article, the case a private internal investigation in Norway is described, where there is a lack of integrity, lack of objectivity, and lack of accountability.     

Feeding the Beast: Nourishing Nativist Appeals in Sweden and in Denmark

Sweden and Denmark share a similar socio-political structure, yet these two countries demonstrate two distinct discourses on immigration. This article focuses on the tone of the debate in Denmark and Sweden concerning immigration and national identity. If the tone of debate is shaped by a language of fear, we argue, this predisposes people to vote for anti-immigration parties. Our analysis highlights the position of anti-immigration parties; hence, the Sweden Democrats (SD) in Sweden and the Danish People’s Party (DPP) in Denmark. We use frame analysis to detect recurrent frames in the media debate concerning the SD and the DPP in the political competition over votes. Our material concentrates on the run-up to the European Parliamentary (EP) elections of 2004 and 2009, in total 573 articles in ten major Danish and Swedish newspapers. We show that the harsh tone of the debate and the negative dialogue risks leading to the construction of beasts that are impossible to negotiate with. In the Swedish political debate, the SD is highly stigmatized as the beast (the extreme other) in Swedish politics and this stigma is used by the SD in the mobilization of votes. In Denmark the religion of Islam as such plays a similar role and provides the DPP with an identity. We conclude that we are confronted with a two-faced beast that feeds on perceptions of the people as ultimately afraid of what are not recognized as native goods.     

Blame Game and Rotten Apples in Private Investigation Reports: The Case of Hadeland and Ringerike Broadband in Norway

Blame game is a term often used to describe a phenomenon that happens in groups of people when something goes wrong. The blame game hypothesis postulates that private investigators may be misled in their search for suspects and that suspected individuals do not necessarily become subject to a fair investigation by financial crime specialists and fraud examiners. The rotten apple hypothesis postulates that it is comforting to assume that one bad apple within an organisation is essentially responsible for the crime that is all too prevalent. The rotten apple view of white‐collar crime is a comfortable perspective to apply to business and public organisations as it allows them to look no further than suspect a single individual. Based on a case study of the Norwegian company Hadeland and Ringerike Broadband, this paper discusses blame game and rotten apple issues in an internal investigation report written by an external financial crime specialist. The study finds support for both hypotheses, as blame is mainly isolated to the criminal and his superior, and both board and top management are protected from scrutiny. Copyright © 2015 John Wiley & Sons, Ltd.     

Falsifying Merton's Macro-Level Anomie Theory of Profit-Motivated Crime: A Research Note

The objective of our article is straightforward. We seek to derive, and to confront with data, an empirical model of Robert K. Merton's macro-level, anomie theory of profit-motivated crime. We use Ordinary Least Squares (OLS) regression equations to estimate the joint effects of measures of the acceptance of material success goals and absolute and relative deprivation, respectively, on cross-national rates of drug trafficking. Consistent with the predictions derived from Mertonian anomie theory, the coefficients for the product terms (the acceptance of success goals × absolute deprivation and the acceptance of success goals × relative deprivation) are significant and positive. This investigation provides what we believe is the first evaluation of the Mertonian proposition that the cultural (goals) and structural (means) components of social systems operate together to increase the level of profit-motivated crime. What is missing, of course, is a measure of anomie. We are forced to infer that anomie is the causal mechanism that links the joint influence of culture and social structure on pecuniary crime. Admittedly, this is an unavoidable limitation of the current investigation.     

情感计算技术如何推动犯罪风险评估工具的发展？

摘 要 随着近年来人工智能深度学习技术的发展,情感计算与人格计算技术日渐成熟,在许多实际应用场景中取得了良好的表现,当前人工智能情感计算技术应用于犯罪风险评估领域,能够有效解决目前主流的风险评估工具难以解决的个体内差异性的预测因子评估问题以及被测评参与者因社会赞许性而导致结果失真的问题。本文在详细阐述目前主流评估工具的局限性基础上,详细阐述了以情感计算技术为支撑的动态风险评估工具的设计思路、目前已有的技术方案以及设计细节的理论依据,在此基础上最后提出以人工智能技术为支撑的新型评估工具的未来发展方向。     

Scientific information and uncertainty: Challenges for the use of science in policymaking

Science can reinforce the healthy aspects of the politics of the policy process, to identify and further the public interest by discrediting policy options serving only special interests and helping to select among “science-confident” and “hedging” options. To do so, scientists must learn how to manage and communicate the degree of uncertainty in scientific understanding and prediction, lest uncertainty be manipulated to discredit science or to justify inaction. For natural resource and environmental policy, the institutional interests of government agencies, as well as private interests, pose challenges of suppression, over-simplification, or distortion of scientific information. Scientists can combat these maneuvers, but must also look inward to ensure that their own special interests do not undermine the usefulness of science.     

Evaluation purposes,processes, products,and probity: Some lessons from experience

This paper shares some of the author’s conclusions following more than three decades of experience with evaluation in a range of areas, including agricultural research, health and social development projects, and programs managed by both national and international agencies. It expounds on the purposes, processes and products of evaluation as well as the probity of the evaluators. Evaluations are often expected to achieve multiple objectives in a short time period and with limited resources. The conclusions and recommendations of evaluations often influence a program’s future course, as well as the reputation of program managers and staff. When there is no effective monitoring or internal evaluation system in place, an external evaluation team must rely heavily on the probity and creativity of its members, particularly, the team leader. This paper offers tips on practical aspects of monitoring and evaluation, and provides insights into research and development processes in developing countries. She has served on the boards, review teams, and advisory committees of several centers affiliated with the Consultative Group on International Agricultural Research. She has done research and has written extensively on social issues involving small-farmer development. She is a senior program adviser for the UPWARD network (User’s Perspective with Agricultural Research and Development).     

A Compatibilist-Friendly Rejection of Prepunishment

In a series of recent papers, Saul Smilansky has argued that compatibilists have no principled way of resisting the view that prepunishment is at least sometimes appropriate, thus revealing compatibilism to be a radical position, out of keeping with our ordinary moral judgments. Recent attempts to resist this conclusion seem to have overlooked the biggest problem with Smilansky’s argument, which is this: Smilanksy argues that the most obvious objection to prepunishment—namely, that it is inappropriate because it involves punishing the innocent for crimes they have not committed—is unavailable to compatibilists. If compatibilism is true, he says, then if it is causally determined that someone is going to commit a crime, the fact that one has not yet done so is a mere temporal matter bearing no moral significance. I argue that there is no reason for compatibilists to accept this point. Compatibilists can (and should) resist Smilansky's claim that one’s not yet having committed a crime is morally insignificant and so resist the temptation to prepunish.     

Dutch experience in the utilization of evaluation research: The procedure of reconsideration

This article examines evidence for the influence of program evaluation results on political decisionmaking. Dutch practice at central government level is illustrated by an interesting and well documented case: the Reconsideration (Review) Procedure, an annual evaluation process attuned to the budget cycle. Possible implications for the optimalization of the use of evaluatory research are discussed. Evaluators have emerged from the 20-year embrace (by the real world) more sophisticated about the complexity of their task and more realistic about the political realities that exist in social programs and about how social science information is used in social problem solving. Marie-Louise Bemelmans-Videc was, until recently, associate professor of public administration at the University of Leiden, The Netherlands. She is currently engaged in (meta-) evaluatory research and advisory work at the Dutch supreme audit institution: the General Accounting Chamber. This article in no way reflects the views of the GAC. He publishing activities cover books and articles related to the science of public administration, the role of professionals in policy-design, and the comparative study of practice and utilization of policy evaluation with European and American governments.     

Commentary on “six domains of research ethics”

This commentary on K.D. Pimple’s “Six Domains of Research Ethics”, focuses on the area of institutional integrity and looks at “relationships between researchers, their sponsoring institutions, funding agencies, and the government,” considering the implications of institutional demands and support for research, and, in turn, demands and support on research priorities and public education.     

我国环境审计研究回顾与展望

上世纪90年代以来,随着环境问题的日益突出以及环保观念的日益增强,我国涌现出大量环境审计研究成果,其主题既涉及环境审计的概念、目标、对象、理论框架等基本理论,也涉及环境审计技术方法等应用理论。然而,现有研究存在过于偏重基本理论而忽视应用理论、过于偏重规范分析而忽视实证研究、过于偏重合规性政府环境审计而忽视环境绩效审计以及企业环境审计等不足。未来应当在借鉴国外有益经验的基础上,联系我国实际,综合运用多种方法,进一步对环境审计的理论框架、主体等问题展开系统研究,尤其应在进一步研究政府环境审计相关理论和应用问题的同时加大企业环境审计的研究力度。     

Crime: Self and Society: Psychoanalytical Perspectives on Taking Responsibility and Moving Forward

The occurrence of a tragic and unnecessary act of evil (crime) induces in us a need to search for blame, to find who or what is responsible. Often this search amounts in a Kleinian splitting between personal and social responsibility – we either blame the person or blame the society, or oscillate between the two. In fact, even movement into a more integrated, depressive position does not solve the problem—the evil of the event is too hot to be contained anywhere. True healing from crime will not result by perfecting the “assigning blame” mechanism in ourselves or our criminal justice system, but rather when we recognize the futility of that search. To use Lowe’s concept of creative limits, only by recognizing our own limitedness will creative and healing spaces that allow the return to innocence occur. Jessica Van Denend serving as an intern chaplain at Bedford Hills Correctional Facility for the past 2 years, became increasingly interested in the complexity of societal and personal complexes wrapped up in the criminal justice processes, and their manifestation in the prison system. While studying under Prof. Ann Ulanov (in the Psychiatry and Religion program at Union Theological Seminary), the author had time to examine what some psychoanalytical tools might have to say about crime and its repercussions.     

Antisemitism in Sweden and Finland A documentation and a psychoanalytic discussion

Political developments in Sweden during the last decade, including a period of increased activities of the extreme right, coincide with a resurgence of previously suppressed antisemitic sentiments in the media and among politicians of different affiliations. Classical, often traditional Christian, antisemitic formulations are published in both Sweden and Finland in connection with media reports of the conflict between Israel and its neighbors. An increase of signs of anti-Jewish hatred among young Muslim immigrants in Sweden is described, as is the Rami-Bergman affair in the 1980s at Uppsala University in which a Professor of Theology testified under oath that there is a compelling Biblical commandment for Jews to kill strangers. Recent antisemitic statements made by high-ranking Finnish dignitaries of government, parliament and church against the background of 20'h century Finnish history are discussed and a government decision to deprive Israel of Finnish-made gasmasks during the American war against Saddam Hussein's Iraq is noted. We contend that traditional antisemitic thought patterns are visible in the Nordic countries and that they can be understood in terms of envy, the narcissism of small differences, the return of the repressed, and as representing an unconscious resentment against truthfulness.