Wells, a CPA himself, said he fears U.S. CPAs are not trained to fight what may seem to be an intractable battle against accounting fraud. "Untrained accounting graduates have been drafted to wage war against sophisticated liars and thieves. And as multi-billion dollar accounting failures have shown, it hasn't been much of a fight," he said.

Wells pointed the finger at accounting programs at colleges and universities, as well as the Sarbanes-Oxley Act, for a "glaring oversight" by offering scant fraud training.

"Just ask the people holding accounting degrees," Wells said. "'How much did you learn about fraud in college?' The shocking answer: little or nothing."

How would you rate the fraud training you received while in school? Excellent Good Decent Bad What fraud training?

After two years in public accounting, Wells spent nearly a decade as an FBI agent. By working actual cases, it became obvious that his formal education and accounting training had left him sorely lacking. "I wouldn't have recognized a fraud because it is much more than simply numbers."

Wells said there are three reasons CPAs cannot catch all material misdeeds:

• The first is the dichotomy of fraud. "Trust is an essential element of business -- and an essential element of fraud," he said. "Absent trust, it is impossible to con anyone. But absent trust, it is also impossible to conduct business."
  
  
• Second, fraud is a crime without unique clues, making it easy to miss. While it is hard to mistake a robbery, an embezzlement may be marked merely by numbers that don't add up.
  
  
• Finally, CPAs can only audit what is presented to them. "Under-the-table deals, sham transactions and the like can be easily concealed," Wells stated. "Holding CPAs to a standard that requires them to detect all material fraud puts them in a no-win situation and they know it. Still, auditors can certainly do a much better job than they've done in the past."

Wells pointed out that key insiders are often the first to divulge corporate misdeeds. Sharron Watkins of Enron and Cynthia Cooper of WorldCom are only the latest in a long line of employees tarred as whistleblowers. But auditors typically react to these tips rather than seeking them out in time to avoid major financial disasters.

"Accountants don't currently learn what motivates fraudulent conduct, how to spot the signals, how to prevent fraud from occurring and much more," said Wells. "As it stands now, auditors are fighting a war without being taught how to recognize the enemy. Until that changes, expect more heavy casualties."