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Dr. Richard Brody, 2012 ACFE Educator of the Year and current ACFE Regent, Promises Unforgettable Training Session Dec 6

We interviewed Dr. Richard Brody to find out what makes him tick and get a preview of what we can expect on December 6. Register today – you don’t want to miss it!

AZ ACFE: Can you summarize your current positions and activities?

Brody: I am a professor – I meet with students, prepare for classes, and lecture. This is my focus for about 3 days of every week. The other days are spent researching, designing and conducting behavioral experiments, and working on presentations and papers. I have been studying decision-making and objectivity for years, and I am one of the few behavioral researchers in internal auditing. I’m also an ACFE Regent, and am on the board of the Institute of Internal Auditors (IIA) Albuquerque chapter. The other side of my life is spent as an expert witness working on cases, big and small, civil and criminal.

AZ ACFE: We see from your CV that you got your start as a staff auditor at one of the Big 8, and held various public accounting and industry positions before becoming involved with the ACFE. What inspired you to become a certified fraud examiner? How has it changed or enhanced your career?

Brody: As a college professor in the early 2000s, I was doing a lot of reading. Fraud was just starting to become a hot topic – we had Enron, Worldcom, and then Sarbanes-Oxley, and fraud was everywhere in the news. But there wasn’t a lot going on in academia. I wanted to develop a new class that would address these issues, and ended up connecting with Steve Albrecht, the author of a fraud textbook. Steve introduced me to the ACFE, which was just starting to provide educational materials. To get the free educational materials, you had to teach a fraud examination class. At the time, there were only a handful of people teaching it anywhere in the country. So I developed a fraud examination class, got certified in 2003 and never looked back. I knew fraud was an area I wanted to do more with. Since then, I’ve developed fraud programs for a couple different universities. Today, almost every university has a fraud class, and the ACFE is a huge organization with incredible support for academics.

AZ ACFE: You’ve had the opportunity to perform research in many different areas. Which areas of research have you felt are the most intriguing?

Brody: I’ve been doing internal auditing research for a long time, and believe it or not, much of it is very controversial. The most intriguing to me has been identifying decision-making biases in accounting professionals. People don’t want to be told they are biased. In a nutshell, when you are internal auditor, it’s hard to remain objective. You may think you’re being objective, but who’s paying your salary? In one experiment, I had two groups, one playing the role of internal auditors, and one playing external auditors. Each group was assigned the exact same task, which was a value-added, consulting type task as opposed to a compliance exercise. You would think they would all come up with reasonably similar answers, but that isn’t what happened. The external auditors were 100% objective, but the internal auditors were not. This is not a criticism as it really just explains human nature.

On the fraud side, the research is still in its infancy. We need more behavioral research. I’ve recently been shifting my focus more to fraud, and am developing materials to help study white-collar felons.

AZ ACFE: Tell us a little about what you’ll be presenting at our holiday event. What can we expect?

Brody: I’m going to say a lot of things that you haven’t heard before. I’m going to talk about a lot of cases people aren’t familiar with, research that you haven’t heard about. Everyone knows about the Report to the Nations, but there is also other research going on that people will be interested to know about.  So I will be covering some current cases and research that you might be shocked by. As far as red collar crime goes, well, most people don’t know what red collar crime is. A colleague coined the phrase, and he and I are the only two I know of that focus on red collar crime. This topic is relevant for anyone who has this type of job – fraud examiner, auditor, or any other job where you might find wrongdoing. When people think of white collar crime, they picture Bernie Madoff or Jeff Skilling. But what if I told you there was a whole other side to white collar crime? What happens when white collar criminals become violent? How prevalent is it? How accurate is people’s perception of white collar criminals? This presentation will change the way you behave when you go to work the next day. It could even save your life.

Want to know more? Register today for the ACFE Arizona Chapter annual holiday luncheon!