Troubleshooting & Guides
Fraud is the intentional deception, whether by omission or co-omission, that causes its victim to suffer economic loss and/or the perpetrator to realize a gain. Simply put, fraud is theft by deception.
Fraud is not just stealing physical assets. There are three categories of fraud: Asset Misappropriation, Corruption, and Financial Statement Fraud Schemes.
Asset Misappropriation: schemes include both the theft of company assets, such as cash, and the misuse and theft of company assets, such as using a company car for a personal trip. Some examples include: theft of cash, theft of cash receipts, accounts receivable schemes, fraudulent disbursement schemes, check tampering, billing schemes, expense reimbursements, payroll, and inventory schemes.
Corruption: Corruption is the wrongful use of influence in a business dealing to procure a benefit for the actor or another person, contrary to the duty or the rights of others. Type of corruption schemes: bribery, kickbacks, illegal gratuities, economic extortion, collusion, and conflicts of interest.
Financial Statement Fraud Schemes: Financial statement fraud is the deliberate misrepresentation of the financial condition of a company accomplished through the intentional misstatement or omission of amounts or disclosures in the financial statements to deceive financial statement users. Some examples are: fictitious or understated revenues, timing differences, improper asset valuations, concealed or overstated liabilities and expenses, and improper disclosures.
Forensic accountants are often engaged to quantify damages in instances related to fraud and embezzlement as well as on matters involving insurance, personal injury, business disputes, business interruption, divorce and marital disputes, construction, environmental damages, cyber-crime, products liability, business valuation and more.
A Forensic Accountant is often involved in the following
→ Investigating and analyzing financial evidence;
→ Developing computerized applications to assist in the analysis and presentation of financial evidence;
→ Communicating their findings in the form of reports, exhibits and collections of documents; and
→ Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.
Better Buisness Solutions will help you get all the hardware you need to get up and running. This includes a subscriber unit antenna, radio, all the equipment to connect it to your computer, and all of the mounting equipment.
→ If you suspect fraud immediately document any known facts and circumstances.
→ Only disclose suspicions of the fraud to “need to know” executives and managers being careful not to let the suspected perpetrator aware.
→ Contact a Forensic Accountant – a Forensic Accountant will investigate the fraud, suggests precautions, institute internal controls and assist to mitigate the damages
A Forensic Accountant can help you detect and prevent fraud. They can also provide a risk assessment to identify your company’s vulnerability and internal control weaknesses.
→ Immediately document your suspicions.
→ Inform your supervisor. If the supervisor is involved, then reach out to upper management
→ Also document any action that is taken against you such as termination, suspension, reduce hours or unrealistic shift changes etc
You would submit various documents as directed by your Forensic Accountant.
We provide other forensic services such as fraud awareness training and fraud risk assessment.
Fraud training help employees understand the impact of fraud on their companies and what they can do to help prevent it. Our program is customized to make it specific to your organization’s needs. Our curriculum includes the three types of occupational fraud, the types of fraud committed by employees and vendors, what causes people to commit fraud, red flags to look out for, and what to do if they suspect fraud.
Fraud risk assessment identifies a company’s vulnerability to internal fraud, the potential inherent fraud risks, assess the likelihood and significance of occurrence of the identified fraud risks, evaluate which people and departments are most likely to commit fraud and identify the methods they are likely to use, identify and map existing preventive and detective controls to the relevant fraud risks, evaluate whether the identified controls are operating effectively and efficiently, and identify and evaluate residual fraud risks resulting from ineffective or nonexistent controls.
Perpetrators display certain behaviors or characteristics that might indicate they are committing or are at risk of committing fraud. These indicators can vary depending on the perpetrator’s level of authority. Examples include living beyond their means, financial difficulties, an unwillingness to share duties, divorce or family problems, addiction problems, refusal to take vacations, complaints about inadequate pay, and excessive pressure from within the organization. However, you should never assume someone displaying these red flags is guilty of fraud. Innocent people can also exhibit similar behavior.
According to the Association of Certified Fraud Examiners’ Report to the Nations, tips have consistently been the most common way to uncover fraud. Employees are the most common source of fraud tips, but customers, vendors, competitors, and non-company sources also submit tips. Other detection methods include internal audits, management review, account reconciliation, by accident, document examination, surveillance or monitoring, external audit, IT control, notification by police, or confession by the perpetrator.
Nearly 80% of frauds in the ACFE’s study were committed by individuals in the following eight departments: accounting, operations, sales, executive and upper management, customer service, administrative support, finance, and purchasing.
Asset misappropriations are those schemes in which perpetrators steal or misuse an organization’s resources. Examples include skimming or forging company checks. These types of schemes are the most frequent but least costly form of occupational fraud. Financial statement fraud occurs in fewer cases but is by far the most costly to an organization. Financial statement fraud schemes include recording fictitious revenues or inflating reported assets.
There is a strong correlation between the perpetrator’s position of authority and their ability to commit fraud. Employees and managers are more likely to commit wrongdoing than owners or executives. However, the median loss in owner or executive fraud is much higher than losses in employee fraud cases. Frauds committed by those at a higher level also take longer to detect.