Monthly Newsletter

September 2018

Welcome to the new-look Exactech newsletter: spring is a good time for fresh plans and projects!

So far, 2018 has been a good year QUOTE OF THE MONTH

– for the fraudsters. The 2018 Global
Economic Crime & Fraud Survey “Rather fail with Honor
conducted by PWC shows that the than Succeed by Fraud”
levels of economic crime have
reached staggering heights with -Sophocles
South Africa having the highest
reported frauds in the world. You TIP OF THE MONTH
would think that large organisations
with their vast resources would be Small and medium sized
winning the battle but not so. I companies may not be able to
don’t think its ignorance, as most of
the victim organisations have
afford segregating duties, so the
internal auditors, risk managers, MD should consider having bank
etc. and Executives know what
statements sent to his/her home
they should be doing to fight fraud
– they choose not to (stupidity or and when they arrive, compare
greed?). them to what the bookkeeper
I think the 2018 Nuix Black Report sums it up – “9 out of 10 ethical hackers say has provided, looking for
that organisations don’t address all the vulnerabilities found during pen tests”. It’s
like being burgled and told that you have 5 windows that do not lock, and you anything out of the ordinary.
fix just 2 or 3 of them and wonder why you keep getting burgled!

Pink Collar Crime: The Rise of the Female Embezzler

Most fraud surveys tell us that the majority of fraudsters (around 65%) are male, which is correct but females account for the
majority of embezzlers.

• Embezzlement is defined as the wrongful taking or
conversion of the property of another by a person
to whom it has been lawfully entrusted (or to
whom lawful possession was given).
• Many females are now in positions of trust
(bookkeepers, accountants, finance managers
etc.) and assets are under their control.
• The statistics on Pink Collar Criminals are alarming.
According to the FBI, male embezzlers have
increased only 4% since 1990 while Pink Collar
Criminals have increased over 40% during that
time.
• Interestingly, it is said men steal for the three W’s:
wine, women and wagers while women steal for
the three C’s: cars, clothing and casinos!
• Here are two great examples…
• Cindy Mills, a cashier at Matthews International,
embezzled $13 million over 14 years.
• Rita Crundwell was the financial controller for the
City of Dixon in Illinois where she embezzled $53
million over 20 years! In both cases the
organisations had external and internal auditors –
34 audited years - makes you think doesn’t it?

Editor: Mario Fazekas Mobile: +27 (0)83 611 0161 Office: +27 (0)11 475 2525
www.exactech.co Email: mario.fazekas@exactech.co
 The Computers are Coming! Ransomware
I read a most interesting article written by the Illinois CPA Society After the Liberty Life
president and CEO, Todd Shapiro, where he says, “accountants and Ransomware attack, one of
auditors face a serious choice, adapt and advance, or get left ever our insurance clients asked us
farther behind”. to do a national IT Security
Awareness roadshow for them.
He went on to say there are three major trends driving the change that The Liberty Life ransomware
calls for disruption in the industry: incident was most probably
caused by an employee
1. Technological innovation - Citing a study from Deloitte and clicking on a phishing link or
Accenture that predicts that as much as 40% of accounting and visiting a compromised
auditing work will be automated by 2020, website, so we put together a
2. Changes in hiring practices – With the move to automation, 90-minute presentation that
businesses and firms are hiring fewer accountants & auditors and will included 10 ‘Too smart to be
instead be looking for data analysts and computer scientists. Scammed’ scenarios where
3. New client demands - Clients are finding less and less value in attendees are presented with
compliance-based services, and more and more in useful advice for a few SMS and emails and
their businesses or their personal lives. each person must say ‘Yes’
they would click the link, or
Whenever we deliver CPD training for accountants and auditors we ‘No’ they would not.
stress that the topics of fraud, ethics and digital forensics are not just
‘nice to know’ but that they should be thinking of ways to offer these These questions were based
services to their clients by co-sourcing with people like us. Have you on the UK’s Take Five to Stop
thought about it? Fraud questions where just 9%
of people scored full marks -
after 80% of them claimed
One of our most popular courses is the 2-day Human Lie Detection they would not fall for these
course – for auditors and HR. (This course and many others are offered scams!
as public or in-house courses. Please click here to access the catalog).
Remember, it takes just one
We have presented this topic as morning seminars for CSSA (Chartered wrong click for the criminals to
Secretaries Southern Africa), SAICA (SA Institute of Chartered compromise your security.
Accountants) and at the 2018 IIA Conference in Sandton…
Our client employees did
surprisingly well compared to
the UK participants and if you
would like to see how you
would score, go on over to the
Take Five website and take the
test.

Ethics & the

EXACTECH Internal Auditor
FORENSICS Fraud Investigations
Phone: (555) 555-5555
26-27 Sept (Jhb)
123 Fake 1-2 Oct (Windhoek)
Street, City, ST 12345 Fax: (555) 555-0000