Forensic accountant explains why fraud thrives on Wall Street

Forensic accountant Kelly Richmond Pope explains how fraud runs rampant – even when businesses don’t intend it.

"Accounting is like a superpower," says Kelly Richmond Pope.

As a forensic accounting expert, Pope understands how this power comes with significant responsibilities and potential pitfalls. The pressure from market expectations can sometimes drive companies to inflate their financial performance, creating a precarious ethical landscape for the accounts overseeing the company’s financial activity.

Pope highlights a key problem area: the mismatch between the money a company actually has (cash) and the money it records as earned (revenue). In the wrong hands, this system can be exploited, leading to serious legal consequences.

She emphasizes that accountants often face hard choices and must stand firm in their ethics to ensure transparency and fairness in business.

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About Kelly Richmond Pope:
Dr. Kelly Richmond Pope is the Dr. Barry Jay Epstein Endowed Professor of Accounting at DePaul University in Chicago, IL. Pope is a nationally recognized expert in risk, forensic accounting, and white-collar crime research, and an award-winning educator, researcher, author, and award-winning documentary filmmaker. She’s the author of Fool Me Once: Scams, Stories, and Secrets from the Trillion Dollar Fraud Industry (Harvard Business Review Press, March 2023). Pope teaches managerial and forensic accounting both at the undergraduate and graduate level.

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Is a capitalist-socialist economy inevitable?

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[haad]

She definitely wins the award for the most charismatic accountant ever.

[djthegrim]

She presented to my class during my Master's program. Great professor and you can tell she truly loves looking into fraud in both Gov and corporate environments

[bradmiller]

A mentor one time told me that in the accounting field you have to be willing to have any day be the last day on a job. Be willing to walk away rather than commit a crime. That is true even if it means missing a mortgage payment or going without health insurance. You have to take a long view that missing a few paychecks is better than ruining your career. Chances are you’ll have to do it more than once in a long accounting career.

[HaveyouheardYT]

She is making accounting sound more exciting than it really is 😅 I love her energy.

[redhidinghood]

She has amazing presentation skills. Her students must be so lucky to have her as their professor

[MN]

The hardest interview I've ever been in I was grilled for an hour with several ethical and fraudulent scenarios and what would I do. I was young in my career and caught off guard. Reality is being an accountant is one of the hardest jobs you'll ever undertake because you're literally dealing with the psychology of people's mindsets about money.

[gfyryho]

As an ex auditor this hits home hard.. She definitely wins the award for the most charismatic accountant ever..

[danielkover]

Never thought of accounting as such a risky job. I have a friend who's a corporate accountant. I hope she handles that pressure well.

[ChiefsFanInSC]

Every business school professor, especially those in accounting, should teach their students that they should ALWAYS be prepared to get fired from their corporate job. ALWAYS. Otherwise, you will exposing yourself to do things that are best unethical and at worse illegal. I guarantee you this accountant had a mortgage, bills, a family that relied on him and he new that getting fired would devastate him financially.

[robhubbard]

As a chartered accountant, I completely agree that where people could fall down is in bowing to that pressure to make results be in line with what targets had been set at. Management can often think that a good enough accountant can make money out of thin air.

However, I have found that my career has been boosted every time I have been able to clearly articulate why I am saying no to something.

Accountants operate similarly to lawyers - there's room for judgement if the facts support it but there are fundamental rules which cannot be broken any more than the law can. Knowing those rules well and having the ability to state why something cannot be so has led to me being questioned on my judgement far less by my CFO and CEO.

[erindabney]

Every industry I’ve interacted with/worked in has corrupt, dishonest, fraudulent, or other shady practices. So that includes: retail, entertainment (specifically music), sales, insurance, healthcare, religion, food service/restaurant, chemical logistics, and finance/accounting. I’m tired of being asked to remember, cover, or fix people’s lies in order to draw a paycheck. Especially given that most of those people were considered “honest, upright citizens.”

[adelaideonaplane]

To her credit, she’s a great speaker. To any person who is not an accountant, she touches on the same topics that are taught in accounting 101 courses from over a decade ago. It’s great to see our profession’s intro syllabus hitting the main stream!

[ArdenAspen]

The problem we have is because Most people always taught that " you only need a good job to become rich. These billionaires are operating on a whole other playbook that many don't even know exists.

[_CoachW]

This really hit home for me. In another life I used to work for a national fitness chain. They were publicly traded and things got interesting with the reporting of revenue vs cash. I was mid level and saw the writing on the wall early. Got out and watched the eventual crash from a distance. Regardless of the industry this happens in one shape or form or another. Be aware.

[Camxlare]

As an accounting student this was very informative, easy to understand and gave me a little insight into cash vs accrual accounting. I was engaged the entire time. I could watch an entire series with Kelly.

[yudithidelis]

There has never been a topic I was less interested in then accounting, but this woman made it sound so cool and high stakes. I was anxious and hopeful for those CPAs! 😂😂

[kylethomas]

This is a topic that no one seems to talk about...audit independence is paramount to the industry yet the primary way the firm makes its money put into question the independence of the firm from its clients.

[Roboto]

Not an accountant, but I used to work for a company that reported the expenditures for the previous month on the fifth of the next month. So, between the first and the fourth of every month there would be this huge meeting where all department heads were present. Say department A forecasted $28K in spare parts but only used $18K, well, not a problem, maybe department B needed $10K extra and it was moved to their bucket. So we would go through this exercise and voila! Each report showed that all departments had made perfect forecasts. It was ‘not’ that one over spent and the other underspent. And this final perfect report was provided to corporate. It was explained to us that a measure of the health of a company was the accuracy of the forecasting of expenditures.
I have also seen in manufacturing operations how the pressure to bring untested equipment is omniscient, even when the new machinery does not perform. Which many times is the result of simply not testing it. Why? Because a measure of the department bringing in the new equipment is being ‘ahead of time and under budget’. If the machine works, well, that is optional and somebody else’s problem in the production floor. I cannot imagine the pressure on an accountant, a professional with a license to practice, being that they are cognizant they may be committing a crime. But I can tell the pressure on engineers to only deliver good news is enormous, and we are only talking about nuts and bolts, not even money.

[amorosogombe]

I'm keeping my company 100% honest. People ruin their lives because of selling out their morals. Honesty is becoming such a scarce commodity I reckon there's an honesty premium to be had out there.

[districtnerfco.]

As an accountant, I was not expecting this video to be an accounting lesson 🤦🏽‍♀️