New study: Two heads are not better than one when it comes to preventing fraud

Monday, November 23, 2020, 12:20am by

Separation of Duties has long been thought to be the most effective control to prevent fraud and errors. It turns out that Separation of Duties IS very effective for preventing errors. But, when you want to prevent your employees from stealing from your company, it doesn’t work well at all. According to new research by Emerita Professor of Accounting Bobbi Barra and colleagues, “Separation of Duties” doesn’t necessarily reduce fraud. In practice, the possibility of collusion pretty much wipes out any advantage of separation of duties. The researchers suspect that people are not afraid of pointing out others’ mistakes, but shy away from pointing out theft and other crimes. No one likes a tattler, after all.

How it all started

The idea came up when Roberta noticed there was no research into fraud controls; only conjecture by well meaning auditors. The authors set out to discover if the conjectures surrounding the most common control, separation of duties, was correct. The analysis presented here is theory that now should be tested empirically. After revisions and strenuous peer review the paper was accepted for publication in the Journal of Forensic Accounting Research (JFAR). JFAR is the premier accounting journal in the United States for research on fraud topics.

What does this mean for your business?

Reliance on Separation of Duties may give you a false sense of security when it comes to fraud. It might be wise to invest in other fraud controls such as a tip hotline, something which the Association of Fraud Examiners has shown to be the most common way fraud is discovered.

About the Authors

Roberta Barra, CPA, PhD., is a retired Professor of Accounting from the University of Hawai’i at Hilo. She has had many years of teaching and research experience in auditing, systems and software consulting involving accounting and ERP software. Her research focused on accounting information systems including internal controls, accounting software evaluations and documentation techniques. Her secondary interests include international accounting and audit-related research. She has presented her research at conference proceedings nationally and internationally. She earned an MBA from the University of Houston and a PhD from the University of Illinois at Urbana-Champaign.

Arline Savage is Professor of Accounting and former Department Chair for Accounting and Finance in the Collat School of Business at the University of Alabama in Birmingham. As a Chartered Accountant, she has worked in industry, the accounting profession and as a consultant. As a professor, she has taught a wide variety of courses at universities in South Africa, Canada and the United States. Arline has been a Deloitte Faculty Fellow, received the Ernst & Young Leader in Ethics Award, the Fluor Corporation Excellence in Teaching Award, the Ernst & Young Outstanding Educator Award and the Loudell Teaching Award. Arline serves on the editorial boards of the two highest ranked accounting education journals, Issues in Accounting Education and the Journal of Accounting Education. She is also a member of the editorial board of the International Journal of Business Information Systems. Arline has over 40 academic and professional publications to her credit, as well as two scholarly books and two textbooks. Among her academic research honors in the United States are six best conference paper awards. In the United States, she has consulted for private equity investors on various accounting and finance projects in the wholesale food, apparel, engineering, and manufacturing industries, and has served as accounting advisor to the chairman of an audit committee of a public company. She also served as interim CFO for an engineering company in California during the post-acquisition phase and has performed business valuations for acquisition and accounting purposes.

Eric Im, professor of economics, joined the University of Hawai‘i at Hilo faculty in 1983. His first and foremost interest was in quantitative economics. His substantial research output covered a wide range of topics in both theory and application: econometric theory, matrix theory, international finance, education, natural resources, taxation, tourism, transportation, and transnational terrorism. Professor Im passed away in 2017.

Roberta A Barra, Arline Savage, Eric Im; Mathematical Formulation of the Effectiveness of ‘Separation of Duties’ as a Preventive Control Activity. Journal of Forensic Accounting Research doi: https://doi.org/10.2308/JFAR-19-012 

File under Business Majors can do Anything: CoBE accounting alumna enrolls in top medical school

Thursday, October 29, 2020, 12:12am by

Raisa Ancheta (formerly Raisa Evora) earned her BBA from CoBE and started as a Senior Accountant at a brokerage firm in the Bay Area. Then she completed a second Bachelor’s degree in Microbiology at the University of Wisconsin-Oshkosh in 2018 with a 4.0 (Summa Cum Laude).

Now she is headed to the UC Irvine School of Medicine, a top-50 medical school that accepts under 2% of applicants each year.

How did she move from accounting to medical school? A long commute, an unexpected move, and a lifelong interest in science:

I was fortunate to work in one of the greatest work environments as a senior accountant. However, I found myself constantly reading science textbooks on my commute to work. I, unfortunately, had to leave my job in the Bay Area when my husband was deployed and stationed in Wisconsin. I took advantage of my new freedom during this time of transition to pursue a passion for science that I had developed. Furthermore, I realized that I could not only have tremendous fun working in a field that I love, but I also had the advantage of understanding the management/accounting/marketing related aspects of business which is an integral part of the health care system.

Her business background and her experience at CoBE made her uniquely prepared for her studies in life sciences and medicine.

I do not think I could have succeeded this way had it not been for the strong foundation I received at University of Hawaii at Hilo. All my professors and mentors at UHH were beyond kind and encouraging. They offered me so many opportunities to shine academically and made me feel like I could succeed in anything I set my mind towards.

Raisa notes that the support of her family has been central to her success.

I am also grateful for the support of all my family on the Big Island of Hawai’i. My mother, Sunday Leimomi Nelson, M.Ed, has been an especially empowering influence on my decision to become a medical student. She advocated for children and families of East Hawai’i in the pursuit of mental health parity. Now, in the dissertation phase of her Doctorate of Education in Organizational Leadership with a focus on Mental Health, she demonstrates a life-long love of learning at any age. Her commitment to learning and the support I had from the UHH faculty inspired me to combine my business background, my love of science, and my desire to help others into a career in medicine.

Raisa lives in California with her husband, two daughters, and two sons.

Certificates in Business, IT, and Finance sought as pandemic disrupts careers

Thursday, June 25, 2020, 7:25am by

Strada Education reports that over half of Americans are concerned about job security in the wake of the pandemic, and many of those believe a career change would require more education. Career-changers prefer certificates over 4-year degrees.

Potential career-switchers prefer non-degree programs

Source: Strada Education

The most popular fields to switch into are Business, Information Technology, and Finance.

18% want to switch to business; 14% to IT; and 9% to finance.

Source: Strada Education

The  University of Hawaiʻi at Hilo offers non-degree certificates in  AccountingBusiness AdministrationData Science,  Finance, and Health Care Administration.  Apply here to enroll in a non-degree certificate; no application fee is required.

The College of Business and Economics also offers executive education and proctoring of professional exams. Contact cobeuhh@hawaii.edu for more information.

CoBE Students awarded Certified Management Accountant scholarships

Monday, June 1, 2020, 5:36am by

Congratulations to CoBE accounting students Karen Basham, Jillian De Coite, Noel Jacob, Hana Jung-Okuda, Michelle Morris, Amber Nagata, and Aron Risley.

These students are recipients of CMA (Certified Management Accountant) scholarships from the Institute of Management Accountants. The CMA is one of the most respected accounting certifications in the profession.

Our students will have up to three years to complete all parts of the CMA exam for free. They will also have 2 -year free access to the online test bank materials to study for the exam.