Recipes for the CFO: How the Books are Cooked!

Welcome to TishTrek - THE JOB BLOG:

Bloomberg News reported on Thursday - September 9th that 1/3 of the corporations surveyed worldwide revealed they are the victims of fraud & embezzlement.

After listening, I only had one thought: This is news?

Then I thought about my kids: OMGosh - One third? Who raised these people? Then you have to push yourself to ask: Who hired them?

As a result of these revelations, I've decided to start a short series to educate others on how corporate crooks cook-the-books:

In Company A, it became critical to introduce world class procurement procedures and to focus on managing the acquisition of talent for all full time, part time, on-shore, off-shore and U.S. contract personnel through ONE office after the company's Chief Information Officer and 8 other senior business officers were terminated.

Here is what a Big 4 consulting firm & others helped Company A figure out:

Executives - some who had been with the firm for decades - had set up anonymous Consulting LLC firms where it was not transparent that the same managers entrusted to make the contract personnel decisions for the firm were actually partners, stakeholders and/or benefactors in the vendor firms selected by them.

While enjoying their executive pay packages, these people profited off of every hour of service performed by consultants in their departments to the tune of millions of dollars over many years. For years, the way many companies approached consulting procurement - especially in the area of information technology - created a ripe environment for this illegal activity to play out.

The unethical people who willingly participate in these kind of activities cause the pay and bill rates of consultants to sky-rocket in their companies and across the U.S. because these employees successfully create a “clandestine system” that allows them to hide behind the LLC header and manipulate the information and financing on both ends of the process. The level of deception is just mind-boggling to comprehend.

How secure are your company's purchasing and procurement practices? Is the wrong talent arriving at your company because every hire or contractor has to be funneled through contracting firms silently tied to your in-house executives? Bloomberg News already answered that question for us when they surveyed global companies.

Oh and by the way, the other reason corporate vigilance in this regard is important is to position your company to recognize the people and vendors who do these things and those who don't. I can promise you that these scams have kept some of the greatest companies on the planet from executing business that would have helped your company.

Make no mistake, you can't stop illegal activity. But introducing world class procurement/ purchasing procedures, researching all stakeholders who profit on the vendor-side and hiring people who live Leader Behaviors will definitely make it harder for those determined to cook your books.

Good luck.

Best regards,
TishTrek