"Fraud: Bringing Light to the Dark Side of Business" by W. Steve Albrecht, et
al, published by IRWIN Professional Publishing (1333 Burr Ridge Parkway, Burr
Ridge, IL 60521-6489), 1995, 296 pages, $30 list
 
A Book Review by Norman C. Frank, PE, CQE, CQA
CER Corporation, Washington, DC
 
"Fraud" begins by describing the nature of fraud and ends with a solid
foundation for establishing a company's own comprehensive fraud prevention
program.  In between, "Fraud" covers detection, investigation, and prevention
of fraud.  Part I discusses the nature of fraud; first documenting and
highlighting the seriousness of the fraud problem, then covering fraud
perpetrators and various control factors.  The "Fraud Triangle" comprised of
the three elements pressure, opportunity, and rationalization is introduced
and each is discussed in detail to show the relationship with fraud
activities.  Case examples are used to illustrate the points being made.  The
authors point out studies showing that people have become less honest over
the past few decades.
 
Part II points out that most frauds are first detected by "fraud symptoms",
rather than direct observation of the fraud activity.  Four chapters examine
the many symptoms of fraud that are available to be seen, if the auditor only
knows where and how to look.
 
Part III uses the three elements of fraud (theft act, concealment, and
conversion) as the basis for discussing the investigation of fraud.  Each
element is discussed in some detail with case example illustrating how the
investigative techniques can be and have been used in a fraud investigation. 
Chapter 12 provides some available sources of information, however
insufficient detail is given to allow you to make use of these sources
without further knowledge or assistance.
 
Part IV focusses in on the primary goal of preventing fraud before it
happens.  The authors highlight the work of management to model and label
honest behavior and removing opportunities to commit fraud.  One worry
expressed by the authors is the Total Quality Management (TQM) movement,
which empowers employees and gives more people control over more of the
activities within the company.  This empowerment can lead to increased
opportunities for fraud.
 
Part V closes out the book with a model comprehensive fraud prevention
program that can be a source of ideas for developing your own fraud
prevention program.
 
"Fraud" is very well written.  Each chapter leads to the next logically and
clearly.  Chapters are grouped logically into Parts.  The case examples used
throughout the book are used in several places to illustrate different points
as they are discussed.  Thus, there is some continuity with the case
examples, rather than a hodge-podge of disconnected examples for example
sake.
 
This book is an excellent introduction and medium level book that would be
very useful for managers as well as internal auditor personnel.
 
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Mr. Frank has over 25 years experience in the field of quality, in the areas
of nuclear quality assurance, research and development, and consulting.  He
is currently in Washington, D.C., with CER Corporation out of Las Vegas,
Nevada, and can be reached at 202-488-5444.