The GAAPweb blog

Fraud in the face of recession

The credit crunch has prompted a few trends: budget shopping, year-long sales and price wars, baby booming, junk food ‘cuisine’ and that fickle temptress, fraud.

I was taking part in a pub quiz the other day when the following question came up:

“What’s the most common illegal practice in the UK today?”

All the teams bar one wrote down fraud (incidentally, the correct answer was speeding). But it goes to show that fraud is considered one of the most frequently committed illegal activities.

According to GAAPweb news, KPMG’s Fraud Barometer reported that the number of serious fraud cases coming to court in the UK hitting a record 21-year high over the first six months of 2009. The total value of these cases was £363 million.

With no immediate sign of economic recovery, more and more people are being driven to varying types of fraud – identity, credit card, benefit, insurance, cash machine, investment, pyramid and Ponzi schemes – the list goes on. It seems that for some, the necessity to pay the bills is greater than the need to abide by the law.

But with fraud costing the economy and individuals so much, it’s safe to say that the general public regard fraud with disdain (Bernard Madoff, anyone?).

Business, professional and personal ethics are extremely important in difficult times. In fact, the Chartered Institute of Management Accountants (CIMA) advocate ethical integrity and encourage it as part of Continuing Professional Development (CPD).

Thankfully, finding a legitimate job during the recession is still the most popular way of making ends meet.

Preparation, passion and competition

Before I start I feel obliged to set this post in context; this week has been the first in my working life where I’ve not had a full-time job. Fortunately it’s through choice (of sorts) but nonetheless, as a finance professional searching for the next big thing I have a lot of empathy with the 2.4 million people who are officially unemployed and the numerous others who are under the government’s statistical radar.

Being flexible, I decided to try something different and, as a result, this has been a pretty interesting week. A week that has taught me a lot of lessons that I thought it might help to share if you’re looking for work or a change of direction.

I’ve only had one interview this week so far. A very brief one. The shortest I’ve ever had. Or ever will (I hope). Legally I’m not allowed to discuss the details but suffice to say that it wasn’t a tête-à-tête with a Group CFO on an industrial estate in Berkshire. Instead, I crashed and burned in front of other ‘hopefuls’ whilst trying to win a place on a business-based, reality TV programme. Crash is probably an understatement, think 13 car pile-up.

I’m not seeking sympathy, but instead I’d like to highlight the reasons for my abject failure despite a pretty smart suit and well-shined shoes. Common mistakes that can happen in all interviews. Mistakes that the way I felt as I trudged home, deflated, will mean I don’t repeat.

It seems so obvious now but I was woefully under-prepared. A combination of arrogance (“I’m good enough for this”) and a failure to walk the process through resulted in my ‘rabbit in a headlight’ moment. Preparation, preparation, preparation. Those words get repeated over and over. But they are so true. It doesn’t matter if it’s 30 seconds or 30 days that you’re planning for. Be prepared. I was a cub scout myself but I didn’t heed Baden Powell’s advice. I should have. Maybe Bear Grylls will have more success.

There’s no such thing as being ‘over-prepared’ if you’re trying to achieve something like a new job. In my mind, I thought that people who were keen were being sad or swot-like. They were actually being smart because they gave themselves a chance of making the cut. My failure to prepare was like signing my own death warrant. I was the golfer who didn’t bother with the putting green before the final round.

The second lesson is that you have to be passionate about what you are trying to achieve. I’ve noticed, when conducting interviews, that the poor candidates appear to be less than enthusiastic and the interview feels flat. This can be overcome by practice and personality, but it’s hard to disguise a lack of passion. My own experience demonstrated that my competitors simply wanted the prize more than I did, and I struggled.

A third lesson is that, like it or not, almost everything you will ever strive for is a competition. Even if it’s an interview for an internal promotion, you’re competing against any or all of the following: your peers, your past, your boss’s ego or a perception of the external competition. You need to put your game head on and think through what it would take to win the prize. It might be counter-intuitive for many meek accountants, but without a bit of competitive fire you’re almost always going to get out-gunned.

With a combination of preparation, passion and competitive spirit I’m confident I won’t have an experience like I did again (certainly one that I could control). Hopefully by sharing this, you too can avoid the pitfalls of the interview from hell!

Colin qualified with Arthur Andersen in 2000, eventually leaving in 2002. After a brief stay at Centrica, he joined Carphone Warehouse and worked in assorted roles with Talk Talk and as Finance Director. He’s now working with Mint Digital, a social media development agency based in Vauxhall.

First marketing, now HR. Finance unifies with…everyone

I recently blogged about a new business model designed to align finance and marketing departments for a more beneficial outcome.

Now there’s news of a further CIMA-funded study that has focused on the working relationship between finance and HR departments.

The international case-study report found that the closer these departments work together, the healthier their company’s performance will be.

It seems that if there is cohesion between HR management, management accounting and organisational performance, as well as strategic plans, bonus schemes and annual budgets, there will be a positive impact in the long term.

HR Directors and Financial Directors can use the findings to set an example for their departments by working together more closely. John Innes, one of the researchers behind the study, said that for finance professionals to “view employees as ‘assets’ rather than ‘costs’” can only be a good thing.

It seems fairly necessary to put the ‘human’ element back into finance, particularly at a time when costs, facts and figures with regards to redundancy have been swamping company mentality.

I’m looking forward to the next offering of research that suggests that finance should work with IT. And sales. And production. Let’s face it, ALL departments in ALL companies in ALL sectors need to enhance their levels of communication with each other for a unified and productive future.