Finding Hidden Income in a Cash Business

I love working on divorce cases where one spouse is trying to hide money. When a business owner has a cash business and is getting divorced, sometimes the income coincidentally (or not so coincidentally!) drops dramatically. What can we do to investigate that? It’s hard. The business owner knows that …

Why is Financial Statement Fraud Such a Big Deal?

The manipulation of a company’s financial statements does not occur as often as asset misappropriation schemes like payroll fraud, check kiting, or inventory theft. And the losses from financial statement fraud aren’t readily apparent to most people. When money is stolen directly (asset misappropriation), it’s easy to see what the …

Preserving Evidence in a Fraud Investigation

Document management is critical in any fraud investigation. Larger cases mean more documents, so the process of managing them is even more important (and maybe more complicated). Part of the document management process is preserving original evidence so that it may someday be used in court. While an investigator often …

Making a Company Look Better with Asset Overstatement

When a company is struggling, it is tempting to manipulate the financial statements to make things look better. Even when things are going well, management may want or need the company to look even better than it already does. Banks, investors, and other interested parties are looking at the financial …

Digging into the Background of Company Owners and Executives

Have you ever wanted or needed to do a background check on an owner or executive of a company? If you’re considering investing in a public or private company, you may want to find out information on the people who started the company, those who currently own it, and those …

Creative Accounting or Financial Statement Fraud?

Companies engaged in financial statement fraud sometimes use creative phrases to legitimize or cover up what they’re doing. Examples include: Aggressive accounting – We’re following the rules, but pushing the limits to make the financial statements look as good as possible. Earnings management – We’re doing our best to “manage” …