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A glance of today’s headlines indicates that fraud is occurring more and more frequently. So what do you do when it happens at your company or organization? Unfortunately, local law enforcement often times does not have the resources to properly investigate fraud. Furthermore, the procedures for gathering evidence for a criminal fraud investigation are not particularly effective in obtaining evidence to be used in a civil case.
After calling law enforcement, consider hiring a Certified Fraud Examiner (CFE). CFE’s have the ability to examine data and records to detect and trace fraudulent transactions, interview suspects to obtain information and confessions, write investigation reports, advise clients as to their findings and testify at trial. CFE’s are well versed in the law as it relates to fraud and fraud investigations; and understand the underlying factors that motivate individuals to commit fraud.
Carneiro, Chumney, & Co., L.C. has a team of CFE’s with extensive experience in fraud detection and prevention.
What are some warning signs of Fraud?
The following are indicators that fraud may be occurring in your business or organization:
- Decreasing cash to total assets ratio
- Decreasing ratio of cash to credit sales
- Flat or declining sales with increasing cost of sales
- Increasing accounts receivable compared with cash
- Delayed posting of accounts receivable payments
- Unexplained cash discrepancies
- Altered or forged deposit slips
- Customer billing and payment complaints
- Rising in transit deposits during bank reconciliation process
Increasing “soft” expenses (for example consulting or advertising).
What are some examples of Fraud?
- Retail Fraud: An employee working at the sales counter has been stealing sweaters for months.
- Bookkeeping fraud: Your longtime bookkeeper has been authorizing checks to herself and recording them as “consulting” expenses.
- Purchasing fraud: Your buyer has been purchasing items with company’s for his own side business.
- Expense fraud: Your leading salesperson has been expensing hotel stays and “client dinners: while on personal vacations.
In addition to investigating frauds, Carneiro, Chumney & Co. can assist you in developing a plan to prevent fraud from occurring in the future. Examples of preventive services offered are:
- Agreed-Upon Procedures Engagements to test internal controls are working as designed and to identify weaknesses in internal control.
- Forensic Audits designed to detect frauds that may be occurring.
- Perform Data Extraction Analysis of your accounting system to identify suspicious transactions.
For more information please contact
John
Dupree
or
Stephen
Oliver
at
210-342-8000
 John Dupree, CPA, CFE, FCPA, MBA
Audit Supervisor
Phone: (210) 342-8000
Email:
jdupree@carneiro.com
More
information
on John
Dupree
Presentation:
American
Society
of Women
Accountants
in June
2007
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Are You a Victim of Fraud? Article by John Dupree
