The Difference Between Cash and Revenue Accounting

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A lot of big companies are reporting their financial statements using accrual basis accounting, which means revenue is recognized when it's earned regardless of when cash is received. So you can have a big, you can show revenue and have very low on cash. That was sort of the in-run problem because they were booking revenue and never actually received the cash or those business that those contracts never came about. And so I think that's one of the reasons that a company can show one day and say, oh, we have 200 million in loss.

Have you ever wondered why Bernie Madoff thought he could brazenly steal his clients’ money? Or why investors were so easily duped by Elizabeth Holmes? Or how courageous people like Jeffrey Wigand are willing to become whistleblowers and put their careers on the line? Fraud is everywhere, and it is costly. In Fool Me Once, renowned forensic accounting expert Kelly Richmond Pope shows fraud in action, uncovering what makes perps tick, victims so gullible, and whistleblowers so morally righteous.

Shermer and Pope discuss: SBF and FTX • Bernie Madoff • The Tinder Swindler • gullibility • intentional perps, accidental perps, and righteous perps • innocent bystanders and organizational targets • accidental whistleblowers, noble whistleblowers, and vigilante whistleblowers • identity theft • IRS scams • doping in sports • Frank Abagnale Jr. • Edward Snowden and Julian Assange as righteous perps • Daniel Ellsberg as a noble whistleblower • Phil Zimbardo and The Lucifer Effect • how to tell if you have been a victim of financial fraud.

Kelly Richmond Pope is the Barry Jay Epstein Endowed Professor of Forensic Accounting at DePaul University in Chicago. Pope’s research on executive misconduct culminated in directing and producing the award-winning documentary, All the Queen’s Horses, which explores the largest municipal fraud in U.S. history. In 2020 the American Institute of Certified Public Accountants (AICPA) and CPA Practice Advisor named Pope as one of the twenty-five Most Powerful Women in Accounting. Her new book is Fool Me Once: Scams, Stories and Secrets from the Trillion-Dollar Fraud Industry.