My second book, Expert Fraud Investigation: A Step-by-Step Guide, was recently reviewed by my colleague Michael Goldman for The Value Examiner, the magazine published for the National Association of Certified Valuation Analysts. It’s read by consultants who work in the areas of business and asset valuation, business fraud deterrence, detection, and investigation, litigation consulting, and financial forensics.

I thought Michael’s review was very kind. And for the record, he and I had never met until a few days ago, so I didn’t have a chance to influence his review in any way. I love reviews like this because they really help prospective buyers of the book get a better idea of whether the book has what they need.

Michael’s review…

I routinely get emails from students, job seekers, or the gainfully employed who want to make a career change… all asking me for advice on getting into the field of forensic accounting and fraud investigation.

Here are my top three tips for getting into this field:

My next book, Expert Fraud Investigation: A Step-by-Step Guide won’t be out until February 9, 2009, but it’s already on Amazon.com and available for pre-order.

From the product description:

A fraud investigation is aimed at examining evidence to determine if a fraud occurred, how it happened, who was involved, and how much money was lost. Investigations occur in cases ranging from embezzlement, to falsification of financial statements, to suspicious insurance claims. Expert Fraud Investigation: A Step-by-Step Guide provides all the tools to conduct a fraud investigation, detailing when and how to investigate. This guide takes the professional from the point of opening an investigation, selecting a team, gathering a data, and through the entire investigation process. Business executives, auditors, and security professionals will benefit from this book, and companies will find this a useful tool for fighting fraud within their own organizations.

From time-to-time, I like to cut and paste from the ever-entertaining stock message boards about Overstock.com (NASDAQ:OSTK). I admit to being a casual observer. I don’t post on those message boards, but do read on occasion. And this exchange was too good to ignore. Plus I like to have the opportunity to read some of my favorite postings again without having to search the boards… they’re right here at my fingertips.

This message was posted last night on Investor Village. CEO Patrick Byrne likes to post on message boards as “Hannibal,” discussing Overstock issues while not disclosing his true identity. While regular readers of these boards likely know it’s Patrick, many others probably don’t. Do you think Patrick ought to provide full disclosure with each of his messages? I do.

Here’s what “Hannibal” had to say:

I recently wrote an article for White Collar Crime Fighter, detailing my experience with a company that tried to do a fraud investigation on its own. The investigation was headed up by the president of the small manufacturer, who should have been spending his time on his real job duties, in order to help the company recover from the financial devastation. This story offers some great lessons for executives everywhere. Tip: Use a professional fraud investigator.

The discussion of the Securities & Exchange Commission’s “no action” letter to Overstock.com (NASDAQ:OSTK) continues around the blogosphere.

On the one side we have the supporters of the company and wacky CEO Patrick Byrne (whos says “yipikaye” in response to the situation), who see this as a complete vindication of the company. They believe this means the SEC is blessing everything Overstock does, and giving the company its stamp of approval. They claim a no action letter is equivalent to the SEC finding “nothing wrong” with Overstock’s accounting and disclosures.

On the other side we have those who think the company’s financials and disclosures stink, and that Patrick Byrne and his executives are actively misleading investors. Those on this side acknowledge that the SEC’s no action letter is disappointing, but realize that it doesn’t mean there couldn’t be future action.

The New York Times published a very interesting story about Joseph Ripp, the former AOL CFO who went from being a whistleblower, to finding himself with civil charges of financial fraud.

Ripp became a whistleblower in May 2001 when he faxed a letter to auditing firm Arthur Andersen about one of AOL’s business partners. He told Andersen that their client (AOL’s business partner) had forged a signature on a contract and booked millions of dollars of phony revenue.

There are four critical pieces to a corporate investigative puzzle. With the proliferation of stories of corporate fraud, managers and executives would be wise to familiarize themselves with the workings of a corporate fraud investigation.

A corporate investigative policy is necessary because it is important to have guidelines in place for the start of an investigation. What should management do when fraud is suspected? How are fraud allegations to be evaluated? When and why does the company initiate a full-blown investigation?

Supporters of Patrick Byrne and Overstock.com (NASDAQ:OSTK) can’t seem to get over the fact that the company has never turned a profit and that it is being investigated by the SEC (despite false assertions in the most recent conference call that the SEC has resolved “all the issues” and has sprinkled holy water on the company) and that there are numerous “unusual” disclosures and elements in the financial statements.

I thought it would be fun to take a trip down memory lane regarding all these unusual, irregular, questionable, problematic, abnormal, odd items and see if a pattern emerges.

While under the watchful eye of the Sith Lord, I have generated quite a few blog posts regarding Patrick Bryne and Overstock.com. Isn’t it amazing how one, solitary public company can have situation after situation that indicates something is wrong with the financial data and disclosures?

As the Essentials of Corporate Fraud book tour rolls on, we’re back at #1 in the Auditing category on Amazon.com!