Companies typically have a standard way of initiating cash disbursements like payments to vendors or employees. Often this involves entering an invoice into the accounting system, ensuring proper approval for payments, and then generating the electronic transfer or check. Sometimes invoices are entered at scheduled intervals and payments are issued …
How do I become a fraud investigator? What skills does a forensic accountant need? I get asked these questions a lot, so today I’m going to give my thoughts on some of the important qualifications and skills a fraud investigator might have. The educational background of a good fraud investigator …
Interviewing witnesses and suspects is a critical part of any fraud investigation. There are tons of resources out there to help fraud investigators learn how to be effective interviews. There are books, videos, courses, and certifications. I’m going to quickly cover some of the high points of interviewing here. Fraud …
With thousands of detailed accounting rules, how can there be financial statement fraud? There are areas of the financial statements that rely heavily on the judgment of management. They make estimates and decide how to apply the accounting rules. This leaves the door wide open for abuse. Many accounting entries …
After more than 25 years conducting fraud investigations, I have learned a lot about fraudsters, their methods, and the companies they work for. Hotlines cut fraud losses in half. Anonymous reporting mechanisms like fraud hotlines decrease the cost of internal fraud. Employees are excellent watchdogs, and are more likely to …
In order to properly plan a fraud investigation, a fraud examiner needs to be able to ask good questions that extract valuable information about what needs to be done. The specific questions vary with each investigation, but the following are some basic areas that an investigator should strongly consider exploring. …
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 …
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” …
Companies rely heavily on reports about questionable behavior from employees, customers, vendors, or other outside parties. Tips are the most common way that fraud is detected by companies, so any credible tip should be taken very seriously. How does a company evaluate the credibility of a tip? Generally, it does …
If you’re familiar with the process of a financial statement audit, you know all about audit work programs. They’re basically the checklists and guides that auditors use to make sure they follow all the required steps for auditing the financial statements. Because these audits are fairly standardized, the work programs …
