ICAEW.com works better with JavaScript enabled.

Why all accountants can (and should) become fraud detectives

Author: ICAEW Insights

Published: 22 Mar 2021

Nigel Iyer has channelled his accountancy and audit skills into fighting fraud for 25 years. He’d like to see more accountants do the same.

Nigel Iyer’s father saw how destructive corruption can be first-hand while working in the Indian health service in the 1950s. The UK National Health Service, by comparison, was a breath of fresh air. As Iyer grew up, his father told him stories about how corruption can tear lives apart. “It really resonated with me,” he says.

Iyer came across fraud through his early roles as an auditor, and as his career progressed, his interest increased. His computer programming skills opened up the opportunity to work in Scandinavia with a large multinational company, working with internal audit and fraud discovery. Seven years later, he moved back to London to work for Network Security Management, where his fraud detection and investigation career took off.

Iyer learned a raft of new skills, such as how to wear a wire and or infiltrate organisations. But the most useful skills he had always came from his accountancy training. “Accountancy is a brilliant skill if you do it like [creator of double-entry bookkeeping] Luca Pacioli, which is to watch the details and follow the money. It’s a great thought: this is the way to keep the world healthy and in balance.”

Iyer now works as a fraud detective and trainer through his firm B4 Investigate, which takes a holistic approach to fraud detection on a global scale. He has written several books about his approach and would like to see more accountants and auditors use their skills in a way that would detect more instances of fraud and other financial crimes. It would make a huge difference, he says.

“I wanted an audit to find what was wrong, rather than check that things were right. So I turned into the ‘fraud guy’. During the 90s, I realised that this was the biggest contribution I could make with my life. We could save organisations and people's livelihoods. Making the world better was a mission.”

Most fraudsters aren’t pathological career criminals, says Iyer. He believes in restorative justice, turning white-collar criminals around so they can help the organisations they were hurting. “Truth and reconciliation are both accounting terms too,” he adds. “Even the people who do fraud are rationalising that they're doing the right thing.”

Financial crime is reaching a point where something will have to give, he says. As global GDP shrinks as a result of the pandemic, the percentage of GDP lost to fraud will increase. It’s a problem that’s been there for centuries but COVID offers the profession the chance to focus more energy on tackling it. It would also provide a service that CEOs are clamouring for. 

“In my talks, I sometimes split managers and auditors into the two halves of the room. I ask the managers: if there's a fraud, would you expect the auditors to find out? They say yes. Then I pose a slightly different question to auditors: is it your duty to find fraud in the organisations you audit? They say no and they’re right, it isn’t.”

Iyer has used a range of media to disseminate his message. In addition to his training courses and books, he is developing a VR training module for a leading university, an online quiz and even songs about corruption.

The quiz is a good place to start if you want to look into developing your fraud detective skills, says Iyer. “It'll tell you what sort of fraud detective you are. There’s a model behind it that scores you into quadrants of what you are. It only takes about five minutes.”

What it ultimately comes down to is that if you're looking for something, you will find it. “I think we're in the era of change. We've got to think about so many things. There's this golden opportunity to do better things.”

To take B4Investigate’s fraud detective quiz, click here.

Company reform and economic crime

The Economic Crime Act 2022 became law in March and part two of the bill is incoming. From risks to required changes, we explore key considerations for accountants on the issue.

A fingerprint